Scorching temps and continuing drought in Ontario aren’t likely to directly cause a spike in crop insurance rates for farmers.
But commodity prices could jump because premiums are mostly reflected by their ranking.
The U.S. is the largest producer of corn. If it loses its crop or has sustained losses, prices worldwide will be affected.
“Corn and soybean commodity prices went up probably 50 to 60% in the last two, three months,” said Casselman farmer Rejean Leclerc.
“And that’s an exact reaction to what’s happening in the Midwest U.S.”
Earlier in the week, Henry Van Ankum, chairman of the Grain Farmers of Ontario, called this a “challenging summer for many of our members” due to the drought, “and we are thankful that programs like crop insurance are available to protect our crops from weather conditions beyond our control.”
There are 74,840 farmers in the province, and primary agriculture contributes $4.7 billion to Ontario’s economy, according to the agriculture ministry.
“We are all proud. We want to see good crops in our fields for all the work we have done,” said Leclerc.
“But in the event that we do not harvest a good crop, the production insurance program is there to limit your losses to a certain point.”
Production insurance is available through Agricorp, a provincial agency.
Growers can count on it when a field crop falls short because of extreme weather, pests or other factors.
Plans vary, and buying insurance isn’t mandatory.
AgriStability is a type of income insurance, “where the trigger is a decline in income or an increase in costs,” reads a backgrounder released by the premier’s office.
“If a farmer’s income one year falls well below his/her usual annual average, AgriStability will help offset the difference.” Growers needing immediate help can apply for an interim payment.
At least 5,000 damage reports have been filed by farmers as of Aug. 1.
If Agricorp has to pay more claims this year than anticipated at the beginning of the year when premium prices were set, the money has to be recouped over the next 20 years.
That prevents huge premium increases from year to year, encouraging farmers to stay in the program, reportedly one of the best in North America.