Alberta’s agricultural producers blighted by this year’s droughts may soon find some relief, with insurance payouts expected to reach $1 billion by the end of the year.
Seventeen municipalities have declared states of agricultural emergency, and it’s estimated that 80% of farmers are experiencing some sort of setback as the result of the dry conditions, reports the Edmonton Journal.
“We are working on prioritizing processes to make sure we get available payments and indemnities out in a timely manner,” Daniel Graham, CAIS program specialist, Agriculture Financial Services Corporation said in an earlier interview with Insurance Business.
The AFSC has already distributed $70 million to farmers, and based on projections that assume the province will experience favourable weather, that number could grow to $700 million to $900 million. If hail storms continue to persist or the region experiences an early frost, damages could exceed $1 billion.
The claims will be paid through a $2 billion reserve fund set up by AFSC with 10 years of collected premiums. The insurer is also encouraging Albertans to contact the AFSC if they want to use crops for feed or pasturing instead of trying to sustain them through the harvest season.
In addition, the insurer is working with farmers to locate Crown land that farmers can “sublet” to feed their animals, and the province is offering discounted rental fees for producers who fill their dugouts and reservoirs with water from lakes and rivers.
While this drought has presented hardships for the region, many farmers believe that conditions do not fare as badly as they did in 2002 when “you couldn’t even find a bale of straw for winter feed.”
Still, the AFSC is awaiting the year’s post-harvest production report before it can determine the full impact that this drought will have on agricultural production.
“We do suspect that there’s going to be a significant increase in production claims for 2015,” Graham said. “Obviously it’s still the growing season and if rain comes there could be crops for some areas, but others have had serious issues such as crops that haven’t even germinated.”
