Why are 5 million acres of Ontario farmland insured under Production Insurance each year?
In a word: protection.
Production Insurance protects Ontario producers from yield reductions and crop losses caused by factors beyond their control. Things like adverse weather, disease and insect infestations.
When you enrol in flue-cured tobacco Production Insurance plan, you are guaranteed a level of production based on your yield history and the level of coverage you choose. A claim may be paid if an insured peril causes your yield to fall below your guaranteed production.
What Production Insurance offers
- Peace of mind (production level is guaranteed)
- Dependable collateral with financial institutions
- Affordable coverage that is cost-shared with government
- Premiums that are tax deductible as an operating expense
- Claim payments that reflect market prices
- Individual crop plans that accommodate unique aspects of each insurable crop
- Payments that are made within the year the loss occurred (in most cases)
Production Insurance is part of the suite of programs available under the Canadian Agricultural Partnership. In most plans, producers pay 40 per cent of the total premium cost and none of the administrative cost. Together, the federal and provincial governments contribute the other 60 per cent. Administrative costs are fully funded by both levels of government.