Understanding Production Insurance rates for grains and oilseeds

​​​​​​Over the last month, Ontario farmers have been receiving their 2015 Production Insurance renewal notices and rates in the mail. When making decisions a​​bout insurance coverage for the year ahead, it’s important to understand how premium and claim rates are set and the impact of extreme crop losses in previous years.  

2015 Premium rat​​​es

Premium rates are determined at renewal time. Rates fluctuate from year to year, depending on the past performance of the plan across the province, prior years’ clai​​m prices and the size of the Production Insurance Reserve Fund.

The trend for 2015 is that premium rates for most grain and oilseed plans have gone down by about 10 per cent. This decrease ​is a result of lower grain and oilseed claims across the province over the past few years and recent market prices. ​

2015 Fixed and float​​ing claim prices

​​Most grain and oilseed plans have fixed and floating claim price options to give producers flexibility in choosing their level of coverage. Floating claim prices are based on the actual market price at harvest time. This helps cover the at-harvest price needed to replace any production shortfall and offers flexibility in developing marketing strategies. Fixed claim prices are set at renewal time and are intended to provide a lower premium cost alternative to the floating claim price. A fixed claim price is a conservative coverage option that won’t fluctuate, regardless of the market. 

Correcting common myths about Product​​ion Insurance

  • One bad production year doesn’t significantly impact a producer’s 10-year average farm yield. Yield buffering applied under the program lessens the impact of large production losses due to insured perils. For more information about yield buffering, refer to the Information Sheet.
  • Premium discounts and surcharges ensure premiums reflect a producer’s individual track record. Discounts and surcharges are capped to help premiums stay affordable and realistic while taking into account the producer’s individual claim rate compared to the claim rate for the crop plan as a whole. Because a producer’s claim history varies by crop, discounts and surcharges are crop-specific.
  • Premiums are cost-shared with the government. To keep premiums affordable, the federal and provincial governments pay up to 60 per cent of the required premiums and 100 per cent of the administration cost of delivering the program. Cost-shared premiums mean the producer portion reflects risk and claim history in the province and on the individual farm, based on actual experience.    
  • Don’t wait to report a loss. Report crop damage as soon as it occurs by calling Agricorp. As soon as a call is received, a report is filed and an adjuster is assigned. The adjuster may contact the producer to schedule a farm visit and inspect the damaged crop.  

Looking back at the 2014 sea​​son

The 2014 growing season was difficult for producers in various parts of the province. Many farmers struggled to get their crops off the field due to cold, wet weather during harvest. For example, in Timiskaming some crops yielded only 50 per cent of the average farm yield. Yet, despite the​​​ challenges of 2014, the total overall reported yields were in line with provincial historical averages. 

2014 average yields and claims paid
CropAverage yieldClaims paid
Corn164 bu/acre$14,0​67,617
Soybeans45 bu/acre$21,218,178
Soft red winter wheat78 bu/acre$13,636,563

Why choose to in​sure

Producers deal with many factors that are beyond their control. Adverse weather, disease, wildlife and insect infestations can have a serious impact on production and income. 

Each year, Ipsos Reid conducts a customer satisfaction survey on behalf of Agricorp to assess how satisfied customers are with the delivery of government programs.

An overwhelming majority of customers agree that Production Insurance protects them from risks beyond their control, provides them with the confidence needed to invest in business improvements, and helps to secure credit with lenders. 

Production Insurance adds a measure of predictability to an unpredictable business. It protects farm businesses when an insured peril causes yield reductions and crop losses.

More than 16,000 Ontario producers farming a total of more than five million acres of farmland are covered by Production Insurance. 

Production insurance rates​ are available at and in renewal packages mailed in March. To apply or make changes to coverage, producers need to contact Agricorp by May 1.