While some producers in southeastern Saskatchewan, depending upon topography, persistence, equipment and luck were able to seed 20, 40 or even 60 per cent of their farm, there are also producers who didn’t turn a wheel. Not surprisingly, there are increasing calls for government assistance.
The first line of defense is crop insurance where the unseeded acreage benefit was increased from $50 to $70 an acre this year. After the various deductions under the formula, the amount actually paid will probably average closer to $60 per unseeded acre.
On any land that emerges from the water, weed control will be needed. In many cases, tillage will be necessary to get the land back into shape for the next crop year. It won’t be hard to spend most or all of the unseeded acreage payment.
Then there are the farm’s fixed costs: machinery depreciation, interest payments, insurance payments, property taxes and living expenses. These costs continue even with no crop to harvest. On some farms, fixed costs may be $70 an acre while on other farms they may be over $100.
While $60 or $70 per acre from crop insurance may sound like a lot of money, producers with a sizable acreage of flooded land stand to lose a lot of money. The problem is compounded for producers who also had flooded land in 2010.
Last year, when the unseeded acreage payment was only $50 an acre, the federal and provincial governments provided an additional $30 an acre top-up whether or not the land was enrolled in crop insurance. The assistance was announced on July 8.
For 2011, governments advised producers to protect themselves by being in the crop insurance program, a suggestion that no additional money would be coming. That’s how farm safety nets should work. There shouldn’t be a need for ad hoc programs.
And extra assistance shouldn’t depend on the magnitude of the problem. If your land is flooded, you should get the same support whether the problem is just on your farm or across the entire region.
But it’s hard not to sympathize with producers facing unprecedented water levels. Through no fault of their own, many are going to have a difficult time scraping together enough cash and credit to seed a crop in 2012. On some land, the water level is so high that 2012 is also in jeopardy.
AgriStability, which provides support based on past reference margins, will be a substantial help for some, but it’s long been criticized for being erratic and unpredictable. It will leave many farm families to fall through the cracks.
If you provide additional support for grain producers, an argument can also be made for assistance geared to livestock producers with hay and pasture land under water. Providing government support is never simple.
It’ll be interesting to see how the flood politics plays out.
I’m Kevin Hursh.