Brian Hind is thankful for sticking with his crop insurance
When I sat down for Thanksgiving dinner last week, I was thankful for crop insurance (and the American taxpayer).
After two years of drought, with indemnity payments making up 20% of my gross income in 2011 and 25% in 2012, I am thankful I didn’t act on my impulse to drop crop insurance five years ago, because I had paid in for 20 years with practically no claims.
Today’s crop insurance is a much improved version of an idea that began with hail insurance, usually for wheat. That evolved into multi-peril crop insurance. Today we not only have yield protection, but also the option of revenue protection. You can have catastrophic coverage that guarantees 50% of the yield at 55% of the price and is very cheap. There is yield guarantee that gives you a set level of production at a set price, and revenue protection that guarantees a set level of production at a price that can go up, but not down.
All plans are subsidised by the government. With the option I use, I pay about $8/acre and the government pays about $24/acre. Private insurance companies provide the insurance, but are strictly regulated by the government.
For both yield protection and revenue protection, your coverage starts at 50% of a yield based on the history of your farm, or if you are a new insurer, the county average yield. It goes up in 5% increments to a maximum of 85% and the producer decides the level of coverage they want. You must buy or make changes to your plan by 30 September for autumn-drilled crops, and by 15 March for spring crops. Prices are based on the average price (depending on crop) in a fixed qualifying period.
My attitude has certainly changed in the past two years. Unfortunately, livestock producers do not have the protection and are really suffering at the moment.
Brian Hind farms 1,250ha of prairie land, of which 770ha is family owned, plus the rest is rented. Of this, 330ha is arable cropping with maize, soya, grain sorghum, alfalfa plus a mix of rye, triticale and turnips for grazing by 200 beef cattle. Grassland is used to produce hay.
