Managing risk with agriculture insurance

  • 2 min read

Protecting the house and car with insurance is commonplace, but when it comes to crops, insurance coverage isn’t as universally embraced.

Nova Scotia's Minister of Agriculture Keith Colwell explains crop insurance adds some predictability to producers’ businesses.

Adverse weather, disease and insect infestations can have a serious impact on production and income, so having insurance is important, he says.

“It protects against the effects of yield reductions and crop losses caused by insured perils,” says Colwell. “AgriInsurance helps maintain cashflow in poor crop years with claim payments that offset losses caused by crop damage and low yields that are beyond their control.” Provinces across Canada offer public and private insurance coverage.

For instance, production insurance from Ontario’s AgriCorp, a provincial Crown corporation, has plans for over 100 commodities and covers yield reductions and production losses caused by weather, disease, wildlife and insects.


On the Canadian Prairies, hail is one of the leading risks to crops, and no other kind of disaster produces as sudden and devastating an impact, says Canadian Crop Hail Association president Rick Omelchenko.

“You can have a crop that’s producing 100 bushels per acre, and then all of a sudden, the next day, it’s like summer fallow,” Omelchenko says.

Not all farmers protect themselves with crop hail insurance.

But not all farmers protect themselves with crop hail insurance. With tight margins, farmers seek cost savings anywhere they can, he says.

While the value of seed and inputs is obvious, “insurance is a piece of paper until you need it.”

Buyer’s remorse isn’t unusual when it comes to crop hail insurance: “When they don’t get hail, they’ve bought too much. When they get hail, they haven’t bought enough,” Omelchenko says.

He says farmers don’t have to choose between buying insurance or being left uncovered. They could purchase enough coverage to cover their costs, but also take a deductible to maximize their dollars to get as much coverage as possible.

CCHA recommends producers have hail coverage in place early in the season as they might be unable to purchase it after storm damage, meaning they’d be left to carry the full risk for the rest of the year.


Crop insurance can be time-consuming, but FCC AgExpert aims to save farmers time on bookkeeping and paperwork, says program director Darcy Herauf.

With AgExpert Field Premium, customers can enter their data, and the program will generate reports for seeded area, harvest production, and stored inventory.

Bottom line

Consider crop and hail insurance as risk management tools. They may not be necessary to curb the havoc nature can bring to production, but it’s money well invested if there is weather damage. With various levels of coverage and deductibles, farmers can choose their comfort level for risk.

Article by: Richard Kamchen