Frost insurance scheme agreed for beet growers

The NFU has announced details of a new insurance scheme that will give sugar beet growers extra protection from frost damage to crops.

The frost insurance scheme, operated by NFU Mutual, is being introduced for the 2012/13 beet-growing season.

It will provide beet growers protection against significant losses where crops cannot be delivered due to frost damage.

The scheme is being introduced following calls from growers who were affected by the severe frosts in 2010 and lost large swathes of crops due to freezing conditions.

Although growers will be invoiced for the insurance, the NFU and British Sugar agreed for this cost to be incorporated into the beet price model for the 2013/14 campaign.

A draft plan of the scheme was announced at the Cereals event this year, but details of the scheme were confirmed this week.

NFU Sugar board chairman William Martin said: “British growers are used to tackling the challenges that come from harsh weather conditions, but the severe frost two years ago made it quite clear to our farmers and the industry that more must to done to protect them when crop losses are unavoidable.

“We are pleased to have secured the introduction of the frost insurance in response to the calls from beet growers.

“This policy will provide a financial safety net if we face another difficult winter and damaging frosts, helping provide security for growers against the risks posed by long campaigns.”

Frost insurance Q&A
Who is arranging this insurance, and why?
Following the significant losses experienced in the 2010/11 campaign, the NFU, at the request of growers, confirmed the introduction of the frost insurance policy for the 2012/13 campaign at the Cereals event in June 2012.

How will the frost insurance work?

The NFU will be the policy holder on behalf of all growers who, as beneficiaries of the policy, will each receive a certificate of insurance, together with a summary of the policy and an insurance schedule at the start of the 2012/13 campaign this September. A copy of the full policy document will also be available on

How will the frost insurance be paid for?

The NFU, as policy holder, will pay the premium direct to the insurers, and the cost of the insurance will be invoiced to each grower for their total contracted tonnage. British Sugar will collect this money on all contracted tonnes on behalf of the NFU under the same method they currently collect seed costs. The cost of the 2012 frost insurance premium has been included in the 2013/14 campaign price.

What will the insurance cost?
The premium for the insurance for this campaign costs 12.75p an insured (approved) tonne. Surplus beet is not included in the cover and does not incur premium costs. This cost has been incorporated in the 2013/14 agreed beet price.

How is the “Agreed Price” on the Certificate of Insurance derived?
The agreed price is the weighted average of CTE and ICE prices that British Sugar has agreed to pay you for your delivered beet.

What does this cover? Is my entire crop value covered by the scheme?
Only the contracted beet (either CTE or ICE) is covered for losses caused by an insured frost event, provided adequate area is planted.

What does the cover relate to and what are the conditions for paying out?
The cover is designed for severe frosts, such as that experienced in 2010/11. The insurers have defined a severe “frost event” as the average minimum temperature of -4°C or lower for a rolling 10-day period up to and including 9 January. In order for a payout to be made, the farmer has to have incurred a loss that is higher than the deductible which is set at 15% of the Insured (Approved) Tonnage.

Is this a voluntary scheme? I always lift my beet and deliver it before the risk of frost occurs so why should I have to pay for insurance?
The scheme would only be operated by the insurers if all growers participated. As risk of the long campaign is spread by some growers delivering late, which allows others to deliver early, then the NFU considers it reasonable for all growers to contribute to the scheme.

Is self-grow beet included?
British Sugar’s self-grow sugar beet is included under the policy, and British Sugar will be subject to the same terms on their self-grow beet as all other growers.

Who will decide on whether my crop is damaged sufficiently by frost to be covered by the scheme and how do I make a claim?
As a grower you do not need to take any steps to make a claim. The policy will be triggered automatically if a “frost event”, as defined in the policy, occurs and a payout will be calculated automatically following the end of the campaign.

Does the policy only cover beet which has not been lifted?
The cover payable in the event of a frost occurrence will be calculated on the total beet not delivered by the end of the campaign under your contracted tonnage (ICE/CTE). There is no requirement for losses to have occurred in the ground only. Equally, once the frost trigger has been reached, any damage from subsequent frosts in the same campaign will also be covered.

Doesn’t having frost insurance mean growers can now decide to not deliver beet but they will still get paid?
The frost insurance has been designed to provide an important safety net to growers to protect them from the kind of losses experienced by many in the 2010/11 campaign. However, the cover value for each grower is up to only 50% of the value of the beet not delivered. It is therefore in all growers’ interests to deliver as much of their crop as possible.

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