The Ontario government has tabled legislation to amend the province’s production insurance regime and to bring it in-line with other provincial regimes. If implemented, the amendments have the potential to widen production insurance coverage to allow livestock, dairy, poultry, and other producers to benefit from coverage in the event of unexpected loss due to weather, pests and disease. This amendment would add to the suite of programs already available through Agricorp which help producers manage risks such as fluctuating costs and market prices.
Currently, production insurance is provided to Ontario farmers through Agricorp, a Crown agency of the Province of Ontario. Farmers split the cost of the premiums with federal and provincial governments. As the legislation is currently worded, coverage is only available to cover losses to an agricultural crop or perennial plant arising from insured perils such as weather, pests or disease.
The Crop Insurance Act of Ontario states at section 5:
5. (4) AgriCorp may enter into a contract of insurance to insure an agricultural crop or perennial plant with any person who,
a) has an insurable interest in the agricultural crop or perennial plant; and
b) otherwise meets the qualifications and requirements set by AgriCorp under clause (2)(a).
Clause 2(a) enables Agricorp to determine the qualifications and requirements for a person to enter into a contract of insurance.
Within this legislative framework, Agricorp offers production insurance for a number of commercially grown crops in Ontario in the following sectors: forage; fruit and honey; grains and oilseeds; vegetables; tobacco and certain specialty crops.
Bill 40, the Agriculture Insurance Act, would amend the title of the Crop Insurance Act (Ontario) to the Agricultural Products Insurance Act, 1996. Bill 40 would strike out the language of the Crop Insurance Act (Ontario) referring to “agricultural crops or perennial plants” and substitute “agricultural products”. The bill would also give the Minister of Agriculture, Food, and Rural Affairs the authority to make regulations designating which agricultural products may be included for coverage. The Minister of Agriculture, Food and Rural Affairs, Mr. Jeff Leal, has stated that input from the agriculture and food industry will be critical in determining the scope of the expansion of production insurance. Livestock, dairy, poultry, and bees could all be included within the list of agricultural products insured under the revamped production insurance regime.
The bill passed second reading on March 11, 2015 and was referred to the Standing Committee on Finance and Economic Affairs for consideration. If passed, these amendments have the potential to add to Ontario farmers’ options to manage risk and losses due to weather, pests, and disease. However, some legislators and observers have commented that any expansion in coverage must also come with an expansion in funding.