Answers to some frequently asked questions...
Questions
- What is Production Insurance?
- What are the benefits of enrolling in Production Insurance?
- Who is eligible for Production Insurance?
- How does Production Insurance work?
- What is my Guaranteed Production and how is it calculated?
- Why does my premium rate differ from the amount quoted on the fact sheet?
- How are Production Insurance payments triggered?
- How are the Production Insurance payments calculated?
- Who can I contact for more information on safety net programs?
- I'm going to green chop some of my crop. What do I have to do?
- Is there a difference between Spring Grain and Red Spring Wheat?
Answers
What is Production Insurance?
Production Insurance is a production-based insurance program that protects farmers against yield reductions and crop losses due to adverse weather and other insured perils. Premium payments from all producers are pooled together into one fund, which is then used to pay claims. In this manner, the claims of a small number of producers are spread over all producers in the program. Claim payments are limited to the producer's guaranteed yield at the insured price.
What are the benefits of enrolling in Production Insurance?
Production Insurance provides the following benefits:
- Peace of mind (production level is guaranteed)
- Dependable collateral with financial institutions
- Premiums that are tax deductible as an operating expense
- Claim payments that reflect market prices
- Assistance with financial and business planning
- Individual crop plans that accommodate unique aspects of each insurable crop
- Payments are made within the year the loss occurred (immediately after harvest).
Who is eligible for Production Insurance?
Production Insurance is available to all Ontario farmers, landlords, and sharecroppers who grow an eligible crop. Currently, 55 crops are eligible under Ontario's Production Insurance program.
How does Production Insurance work?
Many Production Insurance plans are based on an individual average yield per crop, which reflects each producer's production experience. Producers choose from a range of coverage options that provide the level of protection they require. Premium rates are set based on an actuarial methodology. In most plans, producers pay 40 percent of the total premium cost. Together, the federal and provincial governments contribute the other 60 percent. Administrative costs are not included in the premium cost; instead, administrative costs are fully funded by both levels of government.
What is my Guaranteed Production and how is it calculated?
Your Guaranteed Production (GP) for Production Insurance is the amount of crop that you are covered for under the Production Insurance plan. It is calculated by multiplying your average farm yield (AFY) by the coverage level that you have chosen.
Example: If you have insured 50 acres of soybeans at the 80 percent coverage level and your average farm yield is 40 bu/acre, your per-acre GP would be calculated as follows:
GP = AFY x Coverage Level
GP = 40 bu/acre x 80%
GP = 32 bu/acre
Why does my premium rate differ from the amount quoted on the fact sheet?
The premium rates listed on the fact sheet are base rates. These base rates will be surcharged or discounted depending upon your claim history in a particular plan. Higher rates indicate that a customer's claim rate is higher than the average of the plan. If a customer's rates are lower than the base rate, this indicates that their claim rate is lower than the average of the plan.
How are Production Insurance payments triggered?
Producers enrolled in a Production Insurance plan must report damage when it occurs. Claim payments are triggered when the harvested yield is less than the guaranteed production (GP).
How are the Production Insurance payments calculated?
Producers are paid the difference between the guaranteed yield and the harvested yield, multiplied by the selected claim price.
Who can I contact for more information on safety net programs?
Agricorp
1-888-247-4999
Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA)
1-888-466-2372
Agricultural Commodity Corporation
Tel 1-888-278-8807
Fax (519) 766-9775
Ontario Corn Producers' Association
Tel (519) 837-1660
Fax (519) 837-1674
Ontario Soybean Growers' Marketing Board
Tel (519) 767-1744
Fax (519) 767-2466
Canadian Agricultural Income Stabilization (CAIS) Program
1-877-838-5144
Farmland Property Tax Program
1-800-469-2285 or (519) 826-3446
Ridgetown OMAFRA Office
(519) 674-1690
Ridgetown College (University of Guelph)
(519) 674-1610 or main switchboard (519) 674-1500
I'm going to green chop some of my crop. What do I have to do?
If you intend to green chop some or all of your crop, you must notify the Call Centre first. Be sure to allow enough time for an adjuster to be contacted to see the crop. Failure to notify Agricorp prior to green chopping may result in an inaccurate estimate of your yield.
Is there a difference between Spring Grain and Red Spring Wheat?
Yes. Spring Grain and Red Spring Wheat each have their own plan with different details. If you grow both crops, the acres should be reported separately.
