Editor’s Note: This article and title have been updated after the provincial government released its letter in response to APAS.
The Saskatchewan Agricultural Producers Association (APAS) and the provincial government disagree publicly that the province is tying drought-induced crop insurance payments to its deficit for 2021.
The Saskatchewan government on Monday announced a record $ 2.7 billion deficit in its mid-year fiscal update, with Finance Minister Donna Harpauer referring to $ 2.4 billion in payments from crop insurance and additional funds for AgriRecovery programs for livestock producers.
âIf you took away the crop insurance spending, that $ 2.4 billion, plus the support for cattle ranchers, we’d be almost balanced,â Harpauer said. âThis is how important this support was to agricultural producers. “
APAS responded with a press release expressing concerns about the comments.
“In 2020, the Saskatchewan Crop Insurance Corporation (SCIC) reported a surplus of $ 2.4 billion accumulated in previous years, as well as a large surplus in the reinsurance fund,” noted Ian Boxall, vice-president. president of APAS. âIt’s not fair to blame producers for a provincial deficit in a drought year when that surplus is used up. “
Government crop insurance in Canada is a cost-shared program with premiums shared between federal and provincial governments and producers. Producers buy coverage from the program and are only paid when they are in a disaster situation.
âOver the years, growers have worked very hard to reduce risk through our management practices, and we use crop insurance as a last resort when we experience production deficits beyond our control,â says Boxall. âIn recent years, claims have been lower than premiums, which is why a surplus has built up over time. If the crop insurance surplus had been invested in a dedicated fund like the SGI Auto Fund, this money would have been readily available to pay crop insurance claims.
Boxall adds that the federal and provincial governments are also protected by reinsurance policies that protect them from the risk of high loss years.
The province has since issued a strong response to APAS, calling the claims “ignorant or misleading”. The government says it is disappointed that the organization has “deliberately misinformed” its members on the issue.
Going further, the government asked Boxall to back down.
Signed by Agriculture Minister David Marit and Finance Minister Donna Harpauer, a letter to APAS President Todd Lewis states that Boxall does not understand summary financial reports and does not understand the difference between deficit and debt. The government is also sticking to its management of SCIC funds.
“Looking forward, we hope APAS will remember that our government has been unwavering in its commitment to agricultural producers, and that APAS will not take our support for granted the next time it considers making a statement.” also reckless, âthe letter concludes.