Guide to Understanding Crop Insurance

Transcription

1 Guide to Understanding Crop Insurance DELIVERED BY SCIC Saskatchewan Crop Insurance Corporation

2 Deadlines MARCH 31 Deadline to apply, reinstate, cancel or make changes to your current year s Crop Insurance contract, including all crops to be insured and coverage levels. Report any land you have added to or deleted from your farming operation. Customers who want insurance for this year must make arrangements for payment of any outstanding balances by March 31. MAY Seeding deadline for for grain corn in both risk zones. JUNE Full yield-loss coverage becomes effective on winter wheat and fall rye that will be grazed and/or cut for feed. Deadline for planting potatoes (processing and table varieties). Final day to finalize claims on over winter extensions. JUNE 21 Full yield-loss coverage begins today on established spring and fall seeded crops.* MAY 15 Deadline to notify SCIC of bee losses under the Bee Mortality Insurance program. Coverage terminates as of this date. MAY Under the Contract Price Option, this is the deadline to provide production contract information to Crop Insurance. JUNE Deadline for planting potatoes (seed varieties). JUNE 25 Deadline to submit Seeded Acreage Reports on all crops.* Deadline to submit Unseeded Acreage claims. Deadline to report stored grain. Deadline to submit Hive Reporting form. Deadline to submit Stored Honey Report. Deadline to endorse overwintering insurance for the Bee Mortality Insurance Pilot Program. MAY 21 Deadline to seed camelina in the brown soil zone. Deadline to seed all classes of chickpeas. Watch for other seeding deadlines beginning in May and continuing in June. Visit for more information. JUNE Deadline to seed hemp grain. Deadline to seed soybeans. JUNE 5 20 Crop Insurance will not accept yield-loss liability for spring crops seeded after this date.* Deadline to submit Establishment Benefit claims. Deadline to submit a gopher claim on crops that fail to establish due to gopher damage.* Under the Forage Establishment Benefit Option, this is the deadline to seed forage acres. JUNE 30 *Excludes greenfeed. Deadline to seed greenfeed crops insured as forage. Establishment and gopher damage claims on greenfeed must be submitted by this date. 2 3

3 JULY 5 Deadline to report seeded greenfeed acres. AUGUST 25 Deadline to select winterkill coverage for fall rye and winter wheat. OCTOBER 31 Deadline to pay current year s premiums without interest being charged. Contents Frequently Asked Questions 6 Your Crop Insurance Program 8 JULY 11 JULY 15 Minimum summerfallow coverage requirements for the crop year must be met by this date and maintained for the rest of the year (includes acres that are too wet to seed) in order to be eligible for summerfallow for next year. For green manure crops in the brown soil zones, minimum summerfallow coverage requirements must be met and maintained by this date. Under the Organic Reseeding Benefit, this is the deadline to reseed. SEPTEMBER 15 SEPTEMBER 30 Deadline to seed fall rye and winter wheat and be eligible for winterkill insurance. Deadline to file Forage Declarations. Deadline to register forage yield-loss claims or request an extension of insurance on unharvested forage acres. Forage claims submitted between October 1 and November 15 may have indemnities reduced by 25 per cent up to $1,000. Claims will not be accepted after November 15. NOVEMBER 15 Deadline to file Production Declarations. Deadline to submit yield-loss claims on harvested cereal, oilseed, pulse, honey and potato crops, and request any extensions of insurance on unharvested acres (excluding potatoes). Deadline to submit a Fall-Seeded Acreage Report for producers with winterkill coverage on fall seeded acres. Claims submitted between November 16 and December 31 may have indemnities reduced by 25 per cent to a maximum of $1,000. Claims will not be accepted after December 31. Customer Responsibilities 10 Your Coverage 14 Coverage Levels and Premiums 19 Prices 22 Coverage Features 25 Diversification Option 32 Pedigreed Seed Option 33 Crop Averaging Program 34 The Claims Process 35 Preventing Program Abuse 37 Insurable Area Maps 38 JULY 25 For green manure crops in the black and gray soil zones, minimum summerfallow coverage requirements must be met and maintained by this date. OCTOBER 1 Deadline to harvest potatoes (all varieties). DECEMBER 31 Annual crop post-harvest claims submitted between November 16 and December 31 may have indemnities reduced by 25 per cent up to a maximum of $1,000. Claims will not be accepted after December

4 Frequently Asked Questions (FAQs) 1. How do discount/surcharges work? How will my claim affect my experience discount? 3. What does USA stand for? What is eligible for USA? 6. What do I and my son/daughter have to do to get them started with Crop Insurance? 9. What is a farm practice survey and what does it entail? Premium discount and surcharges acknowledge risk differences between customers, reducing premiums for customers without a history of repeated claims. Experience discount and surcharges are calculated using an individual s history of losses and a comparison of individual loss history to area losses. For more information, see page How do quality factors work? When producers select their Crop Insurance coverage they not only have a determined production guarantee, but they also have a designated grade for the crop they are insuring. To determine the amount of compensation for quality loss, SCIC uses a formula that makes up the difference between the value of the harvested production and the value of the designated grade for the insured crop. The difference is known as a quality factor and this factor is applied to the harvested production to calculate the final indemnity. For more information, see page 15. USA stands for Unseeded Acreage Feature. All producers have this protection for land that is too wet to seed due to excessive spring moisture. USA can be stand alone coverage or be part of producer s multi-peril coverage. Eligible acres are the acres you normally seed that remain unseeded by June 20 due to excessive spring moisture. For more information, see page Am I eligible for the Establishment Benefit? How does coverage work for fall seeded crops? Crops that fail to adequately establish or suffer significant damage due to insurable causes before June 20 are eligible for an establishment benefit. Fall crops seeded by September 15 and insured for yield-loss by March 31 of the following year will be covered for spring-related establishment losses that are not winterkill related. For more information, see page How is my coverage calculated? Your coverage is based on what you have grown over the long term and the coverage option you selected. For more information, see page 14. Young farmers taking over family farms can use the experience obtained from the family farm for their own contract. For more information, see Intergenerational Transfer on page How are prices set? The base prices for grain crops are established on the basis of January price forecasts provided by the Market Analysis Group of Agriculture and Agri-Food Canada. These prices represent the expected farm gate market price for the coming crop year. As a producer, you have the option of selecting from a variety of price options, including: Base and Low Price Options; Variable Price Option; In-Season Price Option; and Contract Price Option. For more information, see page What happens to my coverage if I don t grow a crop for one or two years? If you do not grow a crop for one or more years, your previously established individual experience will be compared to the area to establish your current yields. For more information, see Individual Coverage on page 16. A Farm Practice survey examines the farming practices of selected customers, monitoring their farming methods on crops. If you are selected for a farm practice survey, an adjuster may complete up to three inspections during the crop year. The adjuster will review your efforts to prevent and control losses. You may also be asked to provide additional information. For more details, see page Does Crop Insurance share my information? SCIC uses your information for the delivery of its programs and will disclose information only according to the Freedom of Information and Protection of Privacy Act (FOIP). For more information, see page What if I decide to not harvest my crop but bale it instead? If you wish to put your insured acres to a use other than harvesting, you must notify SCIC prior to putting those acres to an alternate use. See page 35 for more information. 6 7

5 Your Crop Insurance Program Saskatchewan Crop Insurance is one component of the Growing Forward 2 agreement. The Growing Forward 2 agreement is focused on innovation, competitiveness and market development. It includes an effective suite of business risk management (BRM) programs. Crop Insurance provides you with insurance for crop losses due to insurable causes of loss, whether a result of loss in quantity or quality of the insured crop. Your insurance covers you in case the crop fails to establish or excess moisture prevents you from being able to seed. You select your coverage level (50 to 80 per cent) which, combined with your past growing experience with the selected crop, determines your production guarantee. SCIC covers you for losses resulting from uncontrollable natural hazards including drought, excessive rain, hail, flood, frost, snow, wind, lightning, hurricane, tornado, accidental fire, damage caused by wildlife, insects, gophers and/or plant disease. SCIC realizes that one insurance package does not suit everyone. For this reason there are many options to choose from, allowing you to tailor your insurance to your farm. ELIGIBILITY Insurance is available to any producer who meets SCIC eligibility requirements. Crop Insurance regulations require contract holders to demonstrate legal, operational and financial independence from all other producers in order to be eligible. All new applicants are required to fill out an application to demonstrate eligibility. Legal independence is defined as legal access to the land (owned or leased) on which insured crops will be grown. Operational independence means you are responsible for farming decisions and have access to machinery and crop storage. Financial independence means you bear the financial risk of any crop loss. SCIC may review existing contracts to ensure they meet eligibility requirements. Where concerns are identified, the contract holder will be advised of the requirements in order to maintain their contract. To apply for a contract, visit your local customer service office or call to meet with us before March 31 of the insurable year. You must apply for a contract of insurance in person. Non-residents of Canada applying for a contract must have verification of approval or compliance from the Saskatchewan Farm Land Security Board. PROTECTING YOUR PERSONAL INFORMATION SCIC requires producer information to deliver effective and efficient programs and customer service. SCIC will use your information for the delivery of the program and will disclose information according to the Freedom of Information and Protection of Privacy Act (FOIP). However, as a government entity, SCIC is obligated to share statistical data with Statistics Canada upon request. SCIC is committed to ensuring your personal information is secure at all times and has implemented privacy procedures to ensure compliance with current legislation. Customers of SCIC are entitled to access their personal information according to FOIP. If customers are concerned about their privacy, they can securityofficer@scic.gov.sk.ca or phone and ask to speak to the Privacy and Security Manager. Complete information regarding our privacy and security policy is available at 8 9

6 Customer Responsibilities NEW CONTRACTS / APPLICATIONS New customers are required to fill out an application in person at their customer service office as early as possible but in all cases before March 31. Visit saskcropinsurance.com/files/ci/applicationchecklist. pdf for a list of all documentation required on your application. If a farming operation is being transferred to another operator, please visit page 16 to learn more about intergenerational transfer. CONFIRMATION OF INSURANCE As a contract holder, you were sent a Confirmation of Insurance listing the insurance selections you made the previous year. Your contract will remain the same for the current crop year unless you make changes. The deadline to make changes for all Crop Insurance programs is March 31. Premiums are charged on acres seeded to crops selected for insurance. There is no charge for endorsing crops you do not grow. CANCELLATION If you wish to cancel your Crop Insurance contract, SCIC requires notification in writing by March 31. The cancellation notification must contain the signatures of all parties named on the contract. REINSTATEMENT In the event you cancel your contract, you can go three years without paying any premium before losing your discount. Contracts with four years of no premium earned will automatically cancel. LAND As part of the SCIC contract, producers must list all land they own and operate. All land changes should be made early, as soon as you are aware of the change, to ensure it is covered under your insurance. All land changes (additions or deletions) are subject to approval. Acre verifications may be necessary to determine eligibility. Land can be added to your contract after the March 31 deadline but the crops on those acres must have been endorsed by March 31, to be insurable. Note: These acres may not be eligible for insurance if damage occurs before you notify SCIC or complete your Seeded Acreage Report. Land rental or sale arrangement documents may be requested to verify land changes. SEEDING DEADLINES To be insurable, crops need to be seeded in reasonable time so they reach maturity before the first fall frost date in your area. Average Maturity in Days Greenfeed June June June June June May May May 21 Camelina (brown soil zone) May 21 Chickpeas (all classes) May 21 Grain Corn May 30 Hemp Grain, Soybeans June 5 Fall Crops September 15 Final Date Liability is Accepted If your crop is seeded by the final date liability is accepted, but too late to be reasonably expected to mature, liability may be reduced or denied. Consider the average days to maturity for each variety in conjunction with the normal first fall frost date in your area. The Ministry of Agriculture s Varieties of Grain Crops contains maturity ranges by crop and variety, and first fall frost information is available at your customer service office or at under Maps. The final dates that liability will be accepted are general, based on the areas with the latest average first fall frost, and reflect the latest date that a crop could be seeded in the province. In most areas, crops need to be seeded earlier than these dates to be expected to mature. Talk to your customer service office for assistance in determining seeding deadlines for insurable crops. SEEDED ACREAGE You must submit a Seeded Acreage Report declaring your seeded acres no later than June 25. This report is necessary to calculate your level of insurance and process your claims. You do not have any Crop Insurance coverage until you report your acres on your Seeded Acreage Report. If you suffer a crop loss and have not reported your acres by June 25, your claim may be denied. Seeded Acreage Report forms will be mailed to you in May. You can phone, fax, mail or drop off your seeded acreage information at any customer service office, or CropConnect customers may complete personalized reports online. If you fail to submit or are late, you may be assessed a penalty of $60. If necessary, an adjuster will visit your farm to gather the required additional information at an additional charge

7 STORED GRAIN You are required to report all stored grain either on the separate Stored Grain Declaration form enclosed with your Seeded Acreage Report package or filed online through CropConnect. Providing your stored grain information will result in more accurate claim payments. Your completed Stored Grain Declaration must be submitted to SCIC by June 25 with your Seeded Acreage Report. If your stored grain amounts change after June 25, contact your customer service office to update your reported information. Updates must be made before harvest begins. Additional forms are available at your customer service office. Note: Stored grain not reported will be considered new production in the event of a yield-loss claim. If your production is mixed with that of any other producer, either in sales or storage, yield-loss claims will be averaged among individual producers. All stored grain, whether the crop is insured in the current year or not, should be reported. Your grain is not covered for losses once it is placed in storage. STATEMENT OF INSURANCE Once you have reported your seeded acres, you will be sent a Statement of Insurance listing your premium, insured crops, total number of acres, production guarantee, premium discount or surcharge and the provincial, federal and producer share of the total premium. Examine your statement carefully as it is your responsibility to report any errors or omissions immediately upon receipt. Your premium is due upon receipt of your Statement of Insurance. Interest will start to accrue October 1. However, if your premium is paid before October 31, there will be no interest charged. Outstanding balances will have interest charged monthly. Claims will be applied to any outstanding balances. Amounts not paid by October 31 will continue to accrue interest at the beginning of each month until the account is paid in full. The interest rate is RBC prime plus two per cent, adjusted quarterly. Any contract with premiums not paid or not having approved payment arrangements made prior to purchasing subsequent insurance will not be eligible for continued coverage and will be cancelled. Your account can be paid online, at your financial institution or at a customer service office by March 31. Cheques are to be mailed and payable to: Saskatchewan Crop Insurance Corporation PO Box 3000 Melville, SK S0A 2P0 DECLARING YOUR YIELDS In the fall, you will be mailed a Production Declaration form. The deadline to submit your declaration is November 15, and declaration information must be provided before you can register any yield-loss claims. You can phone, mail, fax or drop off the information, and CropConnect customers may complete personalized declarations online. The Production Declaration serves two important functions for your Crop Insurance contract: Production information is used to calculate your annual yield. If you do not complete a Production Declaration, your annual yield will be set at zero, reducing your future coverage by 10 per cent for each year you fail to report. Production Declaration information must be submitted before you can register a post-harvest claim and should be filed as soon as you complete harvest. This makes the claim process more efficient, allows us to better allocate our adjusting resources, and improves the customer service you receive. SCIC verifies a percentage of all declarations

8 Your Coverage PRODUCTION GUARANTEE AND QUALITY COVERAGE An SCIC contract guarantees a yield based on what you have grown over the long term and the coverage option you selected. This guarantee appears on your Statement of Insurance in kilograms and bushels for most crops, and kilograms and pounds for those crops typically marketed in pounds. Coverage for yield-loss starts on June 21 for all established crops. Crop losses after June 20 but prior to harvest are assessed through a pre-harvest inspection. Crops are covered for losses in the field; there is no coverage for grain once it is put into storage. Pre-harvest inspections are completed when a crop is put to an alternate use, other than harvest. Failing to report a loss before it is put to an alternate use may void your insurance. Notify SCIC if you are considering putting your acres to an alternate use. Losses on harvested crops are based on production and quality for most crops. Yield-loss coverage ends November 15. If you have not harvested all of your acres, you must contact SCIC to request an extension of insurance by November 15 if you want over-winter losses covered. It is important to store and sell your insured grain separately from all other producers grain and all other crops, whether insured or not. If ownership of the grain cannot be clearly identified, production is averaged among the involved producers. Yield-loss payments are based on the shortfall between the production guarantee and the total net harvested production for all acres of the insured crop. Any appraisals applied to acres put to any use other than harvesting will be included in the final yield loss calculation. Yield-loss payments are determined once the total yield-loss, including quality factors, have been finalized. The production loss is paid at the insured price, according to the price option you select in the spring. The insured price is not based on, nor does it guarantee, market price. Quality is also factored in when calculating yield-loss. A designated grade has been established for each crop based on a historical average grade. When the grade of your harvested production is lower than the designated grade due to an insurable peril, that production is reduced by a quality factor and is used in calculating your claim. Quality factors are determined by comparing the price of the harvested grade to the price of the designated grade. The prices used to calculate quality factors are the post harvest selling prices established through a survey of grain companies and processors from across Saskatchewan. Once these market prices are available, quality factors are listed at by the end of December of each year. These factors are then applied to your claim. Yield-loss payment Production guarantee Yield-Loss Payment $ Yield Quality Both Yield-loss payments are based on the shortfall between the production guarantee and the total net harvested production, adjusted for quality, for all acres of the insured crop. Harvest Quality Quality is factored in when calculating yield-loss. Net harvested production 14 15

9 INDIVIDUAL COVERAGE Your individual average yield is recalculated every time you grow a crop using 90 per cent of your previous individual average yield and 10 per cent of your most recent annual yield. There is a one-year lag in this calculation. For example, yields from two years prior are included in this year s calculation. If you do not grow a crop for one or more years, your previously established individual experience will be compared to the area to establish your current yields. If you are a new customer or are insuring a crop for the first time, you can provide your own records to establish your individual yield. You also have the option of using the Management Experience Transfer (MET) index to determine your yields and choose the best option. New customers with no records will establish their beginning yields at the long-term average yield for that area. TRANSFER OF EARNED CREDIT If you are involved with a contract that involves one or more partners/family members, you can use production records and experience credit obtained from the original farm for your own contract. Yield history, along with the seeding intensity and experience discount or surcharge, may be transferred directly to the new farm. INTERGENERATIONAL TRANSFER Young farmers taking over family farms can use the experience obtained from the family farm for their own contract. The transfer of earned credits would be implemented using partial credits with a three year progression to the full credits of the original contract. MANAGEMENT EXPERIENCE TRANSFER The Management Experience Transfer (MET) index is used to establish a starting yield for a crop where no individual yield previously exists and more accurately reflects the individual customer s farm management abilities. Your MET index is greater than 1.0 if your yields are better than the area average; it is less than 1.0 if your yields are lower than the area average. New customers with no previous yield history start with a MET index of 1.0. Once your yields are established, they are updated using your individual annual production information. YIELD TRENDING Yield trending recognizes the continued advancement in the agriculture sector. Yield trending allows for long-term yields to be increased accounting for improvements in production techniques, varieties and technological advances. Since the program s inception, yield trending has grown to include canola, identity-preserved canola, fall rye, winter wheat, hard red spring wheat, hard white spring wheat, durum, barley and oats. The program s expansion has a number of positive impacts: it increases yield coverage offered to producers where yields are increasing over time and positively impacts long-term yields for producers who have not previously insured these crops. For a complete list of crops impacted by yield trending, visit 90 % Previous individual average yield 10 % Most recent reported individual yield Individual Average Yield Individual Coverage Your individual average yield is recalculated using 90 per cent of your previous individual average yield and 10 per cent of your most recent annual yield. Yield Trending Long-term yields are increased to account for improved production techniques, varieties and technological advances. The feature includes canola, identity-preserved canola, fall rye, winter wheat, hard red spring wheat, hard white spring wheat, durum, barley and oats

10 YIELD CUSHIONING Yield cushioning provides greater protection and coverage to Saskatchewan producers by limiting the impact on yields in poor crop years. Yield cushioning includes forage crops. Yield cushioning reduces the impact of consecutive poor yields by limiting or cushioning the decrease in a producer s yield coverage. Yield cushioning occurs by crop and land use. When two low yields occur in consecutive years, the amount the yield level drops will be cushioned in the second year. For this year, yields from two years ago will be cushioned to 70 per cent of the customer s Long-Term Individual Yield. Some conditions will apply. Customers with uninsured causes of loss, or who have a MET less than 0.85 and a surcharge of 15 per cent or more, are not eligible for yield cushioning. Coverage Levels and Premiums For most crops, customers may select coverage at 50, 60, 70 or 80 per cent of their average yield. The premium for this coverage is cost-shared at 60 per cent by governments, 40 per cent by producers. Coverage is only available up to 70 per cent for the following crops: alfalfa seed, caraway, chickpeas, coriander, dry beans, khorasan wheat, potatoes, timothy hay, honey, soybeans, hemp, camelina, grain corn and wild rice. Premium is only charged on the actual acres seeded and selected to insure. You may endorse all crops and if you do not grow them, premium is not charged. Premium for the Unseeded Acreage Feature will show up as a separate charge on your statement. Long-term individual yield Reduced yield Reduced yield Year 1 Year 2 Cushioned to 70 % Cushioned coverage Yield Cushioning When two low yields occur in consecutive years, the amount the yield level drops will be cushioned in the second year. PREMIUMS AND COST SHARING SCIC sets premium rates to recover losses (claims paid) over the long-term and to maintain a sustainable program by paying off program debt and building a reasonable reserve. The methodology used by SCIC to calculate premium rates and yields must be certified by an actuary and approved by Agriculture and Agri-Food Canada every five years. Premium dollars are not used to pay for program administration. The full cost of program administration is cost-shared by the federal and provincial governments. Premium rates are updated annually on a crop and risk-zone basis. Risk-zone rates are based on the claim payment history from 1973 to the present, specific to each crop and risk zone. There is a one-year lag in the information used. The premium rate itself is only one factor in the dollar-per-acre premium to the customer. The dollar-per-acre premium is calculated using a combination of the premium rate, the risk zone long-term average yield, the selected coverage level (50, 60, 70, 80 per cent), the insured price and the customer s experience discount or surcharge. PREMIUM DISCOUNTS AND SURCHARGES Premium discounts and surcharges acknowledge risk differences between customers, reducing premiums for customers without a history of repeated claims. Experience discounts and surcharges are calculated using an individual s history of losses and a comparison of individual loss history to area losses. When an increase in the number or size of losses is experienced, the discount, if present, is reduced or the surcharge is increased. The following crops and programs are excluded from all experience discount and surcharge calculations: camelina, dryland dry beans, honey, hemp, soybeans, vegetables, wild rice, timothy hay, the Forage Diversification Option, Forage Rainfall Insurance Program, Corn Heat Unit Program, Establishment Benefit, grain corn, Bee Mortality Insurance Program, Fruit Tree Insurance Program and Gopher Damage claims

11 Premium Discounts and Surcharges How your individual claim history affects discount/surcharge: The number of credits or debits earned will be added to the previous balance. Partial credits are rounded down. Accumulated credits or debits must achieve a complete step before the discount or surcharge is adjusted. The maximum number of both debits and credits a customer can accumulate is 16. Customers with 16 credits cannot lose their 50 per cent discount based on one or two years of claims. There is a one-year lag in the calculation. New contract holders will remain at zero following their first year of coverage due to this lag. No claim Indemnity Less than or equal to 20% of total net annual premium. (Cumulative premium paid by the producer and governments) Greater than 20% but less than or equal to 100% of total net annual premium Greater than 100% but less than or equal to 200% of total net annual premium Greater than 200% of total net annual premium Discount/Surcharge 1.0 credit earned 0.5 credit earned No change 1.0 debit earned 2.0 debits earned Comparison to Area Lowest risk customers have no claim in a risk area where 70% of customers have received indemnity Low risk customers have no claim in a risk area where 60% of customers have received indemnity Average risk customer High risk customers among the next highest 10% of indemnity paid relative to premium among claimants Highest risk customers among the highest 10% of indemnity paid relative to premium among claimants Accumulated Credits to 16 Discount % Accumulated Debits to -16 Surcharge % Discount/Surcharge 2.0 credits earned 1.0 credit earned No change 0.5 debit earned 1.0 debit earned INSURABLE CROPS SCIC insures crop varieties suitable for local growing conditions throughout the province. Insurance is also available on a larger number of specialty crops. When selecting crops, distinguish between all wheat and canola varieties. For a complete list and the terms and conditions, visit or a customer service office. INSURED CAUSES OF LOSS SCIC covers you for losses resulting from uncontrollable natural hazards (see complete list on page 8). Losses that are controllable or could have been prevented with sound farm management practices are not covered. If an insured cause of loss cannot be identified, coverage may be reduced or denied; therefore, it is important to notify SCIC immediately when damage occurs. UNINSURED CAUSES OF LOSS The uninsured cause of loss policy ensures that producers following industry recommended farm management practices are not at a financial disadvantage to those who do not. Generally, SCIC does not advise producers on what are acceptable farm management practices. For some specialty crops, there are specific terms and conditions that apply. Producers can gain more information about their business through available sources of agronomic information or industry experts. Any controllable loss is considered an uninsured cause of loss. Examples include: Poor quality seed Improper seed placement or seeding date Uncontrolled, excessive weed populations Chemical damage Insect or disease damage where it is possible and practical to prevent or control the damage Many different factors can reduce yields. Risk can be decreased by actively monitoring crops and taking any necessary measures including a combination of cropping choices and rotations, timely seeding, stubble and fertility management, field scouting and monitoring, and timely use of crop protection products. You are expected to implement appropriate measures if there is a clear economic advantage to doing so and assuming normal growing conditions for the rest of the crop year. Failure to do so may result in the claim being denied in full or reduced. Contact your customer service office before destroying any crop or putting it to an alternate use. Organic uninsured causes of loss are available on the website, the Organic Guide or by contacting your customer service office. When a crop is not adequately monitored or control measures are applied too late to be effective, uninsured causes of loss are applied

12 Prices The base prices for grains crops are established on the basis of January price forecasts provided by the Market Analysis Group of Agriculture and Agri-Food Canada. These prices represent the expected farm gate market price for most crops for the coming crop year. Producers have the option of selecting the Low Price Option for each crop, which is set at 85 per cent of the base price for the crop. Also available are the Variable and In-Season Price Options. A select group of crops are also eligible for the Contract Price Option. Pedigreed, forage and organic crops have their own price structure to reflect the value of these crops. Alternative sources are used to determine prices for some smaller acreage crops. Visit to access the online calculator through CropConnect to determine premium. VARIABLE PRICE OPTION AND IN-SEASON PRICE OPTION The dollar guarantee for both Variable Price Option (VPO) and In-Season (ISP) will be recalculated based upon the final price. Producers should be aware that the dollar guarantee may fluctuate up or down, depending on final pricing. The premium is based on the historical relationship between the actual base price in the spring and the final price. This allows the premium costs to be finalized in March regardless of the direction the prices move for the final price. However, premiums will be higher than for the base price or Low Price Option, to mitigate the risk of price uncertainty. The final price for a crop can increase or decrease by a maximum of 50 per cent in relation to the base price for the crop. The CPO or CAP is not available if VPO or ISP is selected. Either option must be selected by March 31. VARIABLE PRICE OPTION The Variable Price Option sets the final price in July (September for forage crops). It uses the July forecast of the expected farmgate market price for the coming crop year, provided by the Market Analysis Group of Agriculture and Agri-Food Canada. IN-SEASON PRICE OPTION The In-Season Price Option sets the final price in February following the year of selection. An interim payment will be made when the claim is processed, based upon a percentage of the spring base price, and the final payment will be issued once the In-Season Price is finalized. JULY Uses forecasted prices Higher or lower $ coverage Premium certainty + 50 % +/ 50 per cent of base price Variable Price Option July price forecasts are used to reflect market conditions closer to the beginning of the crop year and premiums are set up front. In-Season Price Option Current season crop price averages are used and premiums are set up front. SEPT FEB $/ Six-month average actual price survey Higher or lower $ coverage Premium certainty + 50 % +/ 50 per cent of base price 22 23

13 CONTRACT PRICE OPTION The Contract Price Option allows a customer to insure a crop at the price at which it is contracted. To access a complete list of crops available for insurance under this option, visit www. saskcropinsurance.com or your customer service office. The insured price is an average of your contract price and SCIC s base price based on the amount of crop contracted and your production guarantee. This creates a blended price for which you will be insured. The blended price will be used to calculate the coverage and premium for all acres of the insured crop, including those that are not contracted. Your insured price does not guarantee market price. Note: Most total production, partial production or deferred delivery contracts are eligible. For deferred delivery contracts, the delivery period must be August of the crop year or later. The producer must be financially independent from the buyer for the contract to be eligible. SCIC requires a contract to determine insurable price. Eligible contracts must specify the contract price or a price premium (e.g. dollars per bushel or dollars per tonne) and the quantity of grain or number of acres contracted. A maximum allowable contract price will be set by SCIC for each crop by April 30 of the current crop year, based on contract prices offered by Saskatchewan s primary contractors. Contract prices will be capped at this value. You must provide SCIC with a copy of the contract by May 31 of the current crop year. SCIC will use that information to calculate the insurable price, coverage and premium for the crop. If you do not provide complete contract details, your insured price will default to the base price for that crop. For losses due to quality, SCIC applies standard quality factors. Quality is not determined by criteria stated in your production contract nor on the final price of the crop. If the use of SCIC standard quality factors places you in a claim position, your claim will be paid using the calculated blended price. Coverage Features ESTABLISHMENT BENEFIT FOR SPRING SEEDED CROPS To be eligible for an establishment claim there must be an area that is five acres or greater together in one piece (not scattered) per legal land description. The non-established acres must exceed the lesser of 10 acres or 10 per cent of the total acres seeded before an establishment claim is paid. Both acre conditions are to be met. Crops that fail to adequately establish or suffer significant damage due to insurable causes before June 20 are eligible for an establishment benefit, even if reported as yield-loss after June 20. If you believe it is necessary to reseed or work down a portion of your insured crop prior to June 20, contact SCIC immediately. An adjuster must inspect those acres prior to reseeding or destroying the acres. Insurance may be purchased on the reseeded acres even if the crop was not previously selected. If the reseeded crop was previously selected, those acres will continue to be insured. To be eligible for insurance, reseeded crops must abide by SCIC s seeding deadlines. SPRING ESTABLISHMENT BENEFIT FOR FALL-SEEDED CROPS Crops seeded by September 15 and insured for yield loss by March 31 of the following year, will be covered for spring related establishment losses that are not winterkill related. Yield-loss coverage will be denied if fall-seeded acres are grazed in the fall, or in the spring, prior to June 10. Contact your customer service office if grazing or cutting your fall seeded acres for feed after June

14 UNSEEDED ACREAGE The Unseeded Acreage (USA) feature is included with multi-peril insurance coverage and all producers have this protection for land that is too wet to seed due to excessive spring moisture. Acres subject to flooding, such as sloughs in the field that are traditionally wet or remain underwater in a year of normal moisture, are not eligible. However, if a producer was able to work, mow or burn the areas that were wet, essentially prepare the seed bed in the fall, then this land would be considered eligible for USA coverage. Acres that are deemed as too wet to seed are excluded from any future USA claim calculations until they are in a condition to seed. Any land that remains underwater due to previous years moisture is not eligible as it is not considered in adequate seeding condition. SCIC strives to inspect all USA claims in a timely manner. Where USA claim volumes are high, producers may have their claims paid without an inspection. There are four coverage levels: $50, $70, $85 and $100 per acre. This is an adjustment to the separate Buy-Up option that was available in 2012, 2013 and Customers can choose the lower or higher coverage to correspond to their individual needs. Unseeded acreage premium will be charged on acres a producer normally seeds, whether or not the land is seeded or insured for yield-loss. This feature is not optional. Discount and surcharges are applied to Unseeded Acreage premiums but claims are not included in discount/surcharge calculations. This feature does not provide payment on every reported wet acre. Eligible acres are the acres you normally seed that remain unseeded by June 20 due to excessive spring moisture. A five per cent deductible is applied to quarters with acres too wet to seed. The deadline to submit an unseeded acreage claim is June 25. Claims received from June 26 to July 2 will be subject to a 25 per cent reduction in payment to a maximum of $1,000. Claims received after July 2 may be denied. GOPHER DAMAGE FEATURE Crop Insurance includes gopher damage as an insured cause of loss under both the Establishment Benefit and yield-loss components of the multi-peril program. All crops for which SCIC offers establishment coverage qualify for the Gopher Damage feature. During the establishment period, customers have two options for acres damaged by gophers: 1. Receive an establishment indemnity; or 2. the Gopher Damage feature. If a customer chooses to file an establishment claim, standard eligibility applies. Any subsequent crop seeded on those acres is eligible for further establishment and yield-loss coverage. Compensation is provided at $50 per acre for crop acres destroyed by gophers. Such acres are not eligible for further insurance within the current program year. Damage occuring after June 20 may qualify for compensation under the Wildlife Damage Compensation Program. For more information, contact your customer service office or visit Unseeded Acres NORMAL MOISTURE YEAR The USA feature is designed to compensate producers who are unable to seed due to excess spring moisture. Acres subject to flooding, such as sloughs in the field, that are traditionally wet or remain underwater in a year of normal moisture, are not eligible. All USA claim acres are subject to inspection. Eligible wet acres Slough, ineligible wet acres EXCESS MOISTURE YEAR Slough, ineligible wet acres Eligible wet acres 26 27

15 Seeding Intensity Acres normally seeded are determined using your total annual crop acres multiplied by your historic seeding intensity. The seeding intensity is the seeded acres compared to the total cultivated acres and calculated as a percentage. Your claim seeding intensity is the average of the previous four years. The four year seeding intensity used to calculate your Unseeded Acreage claim will be calculated as follows: Year Acres Seeded Acres Too Wet To Seed Summerfallow Total Acres Annual Per Cent Seeded Year ** , % Year ** ,000 95% Year ** ,000 80% Year ,000 86% 4 Year Avg 90% **For 2010 and forward, wet acres are considered seeded for the purpose of this calculation. For eligibility purposes, SCIC calculates a whole farm claim (using the seeding intensity) separate from a summerfallow claim, as all acres of the previous year s summerfallow are expected to be seeded in the current year. The Unseeded Acreage claim is paid on the greater of these two calculations. Your Unseeded Acreage claim may be reduced or denied if your loss is significantly greater than other producers in your immediate area due to management practices. (For example, failing to seed when it is possible.) Acres reported as too wet to seed and included in an Unseeded Acreage claim are not eligible for any subsequent coverage including greenfeed and wildlife. Unseeded Acreage and Establishment Benefit If conditions are too wet to reseed, a producer may be eligible for an Unseeded Acreage benefit on the acres where an Establishment Benefit was previously paid. These acres do not have to be destroyed to be eligible for the Unseeded Acreage Feature. If a field, or area in a field, is eligible for an establishment claim and excess moisture prevents another crop from being seeded, the Unseeded Acreage claim may be paid as well. There will be no further coverage on the affected acres. If the field, or area in the field, does not qualify for an Establishment Benefit due to having sufficient plants or less than five acres in an adjoining block the crop will have full yield loss coverage. OPTIONS Winterkill Winterkill coverage is a separate option for fall rye and winter wheat. Winterkill claims are subject to an eight per cent deductible per legal land description. Producers have until August 25 to select winterkill insurance for fall rye and winter wheat crops to be seeded by September 15. Premiums are charged in the year of establishment. Winterkill coverage for winter wheat, seeded in the fall prior to the year of harvest, will be available in all risk zones regardless of the stubble type into which the crop is seeded. The stubble type determines if the acres are charged a low- or high risk premium rate. Contact your local Crop Insurance office for further details regarding stubble requirements. Customers with winterkill coverage will be asked several risk assessment questions on the Fall-Seeded Acreage Report which will determine the risk category of the acres. Yield-loss coverage can be selected in the spring of the harvest year. If you do not select winterkill coverage, fall crops to be insured for yield-loss are subject to a spring inspection to assess establishment

16 Irrigation Coverage Comprehensive coverage is available for crops grown on irrigated and dryland land uses. To reflect the higher production potential and reduced risk of irrigated crop production, coverage is based on individual irrigated production records, and the premium rate is reduced to a percentage of the dryland rate. Producers contribute 40 per cent of the premium cost and governments contribute 60 per cent. With the exception of the Enhanced Irrigation Option, production from all acres of an insured crop, both dryland and irrigated, is combined when calculating a claim for a crop. Enhanced Irrigation To recognize the unique risks associated with irrigated crop production, SCIC is continuing the Enhanced Irrigation Option. The program allows irrigated producers to further tailor their insurance by allowing a separate production guarantee for irrigated and dryland acres of the same crop. Coverage and claims on irrigated acres of a crop is calculated separately from a claim on the dryland acres of the same crop. This allows a customer to be protected against losses on one land use without being impacted by the production of the same crop on the other land use. Under the terms of the Growing Forward 2 Agreement, this enhanced option requires the customer to pay 66.7 per cent of the premium. However, the provincial government contributes the premium required to reduce the customer premium share to 40 per cent, as in other program options. If you opted for the Enhanced Irrigation Option last year, it will be listed on your Confirmation of Insurance in your endorsement package. If you wish to discontinue this coverage you must contact your local customer service office. Customers wishing to select this option for the first time must contact Saskatchewan Crop Insurance. Customers are required to harvest and store irrigated and dryland production separately in order to be eligible for separate dryland and irrigated coverage. Please contact your customer service office for customer specific details

17 Diversification Option Pedigreed Seed Option The Diversification Option is available for crops and varieties that are not insurable under core multi-peril Crop Insurance. To be eligible for this option, you must also have insured acres of traditional grains, oilseeds or pulses in the multi-peril program. A maximum of 30 per cent of total acres insured under the mult-peril program can be included under the Diversification Option. Coverage levels, premiums and any claims paid for the crop grown under the Diversification Option are equal to the average coverage, premium and claims paid for your insured multi-peril acres. Diversified annual crops that fail to establish by June 20 due to insurable causes may be eligible for a Diversification Establishment Benefit. A minimum of 10 acres or 10 per cent of the total eligible acres seeded to the insurable diversified crop must have failed to establish to receive a benefit per acre. If your diversified crop has failed to adequately establish or has suffered damage before June 20, contact your customer service office. Eligibility requirements for the Establishment Benefit will be determined by an SCIC adjuster. Customers selecting this option must be members of the Canadian Seed Growers Association. Recognizing the unique value and higher costs associated with pedigreed seed production, the Pedigreed Seed Option provides: A higher price option for insurable crops A quality adjustment if the germination of the seed produced is below certified seed standards due to insurable causes of loss If you believe the germination of your harvested production is below the certified standard, you must request a germination test when the adjuster completes the claim or supply a record of a germination test. crop. For example, if you choose 70 per cent coverage on your HRSW crop under the Pedigreed Seed Option, you must also select 70 per cent coverage for your commercial HRSW crop. Individual coverage and yield-losses are calculated and updated separately for pedigreed and commercial crops. Pedigreed and commercial production must be kept separate. If you harvested feed HRSW that failed the germination standards for Canada Certified #1, the quality factor would be calculated as the commercial factor divided by the price difference between pedigreed and commercial. If you select the Pedigreed Seed Option, you must select the same coverage level for your commercial Diversification Option Pedigreed Seed Option Include 30 per cent of the grains program s insured acres. Coverage levels, premiums and claims are equal to those of your multi-peril acres. Premium # of acres Up to Average premium Eligible diversification acres Premium Diversification premium This option provides a higher price option for insurable crops and a quality adjustment. If you select the Pedigreed Seed Option, you must select the same coverage level for your commercial crop. Acres insured under grains program Diversification acres *Premium based on per acre average of other crops. Pedigreed seed coverage level Commercial crop coverage level 32 33