Farmers should have more salvage benefit options in future years if they have a serious corn quality problem like this year’s DON challenges.
The federal and provincial governments recently announced a new tiered corn salvage benefit that will be introduced to production insurance plans. This is in response to requests from farmers who, as a result of poorly timed inclement weather, dealt with substantial levels of deoxynivalenol (DON) in their corn crop last year.
Why it matters: The new tiered benefit system is intended to help reduce the cost of harvesting, handling, and storing DON-infected corn – while helping farmers find alternative markets.
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The tiered salvage benefit is intended to more accurately reflect the additional costs associated with harvesting and handling corn affected by DON – while helping grain growers find new markets for it. Both organic and conventional corn growers can access the program starting in the 2019 crop year.
Grain Farmers of Ontario (GFO) praised the initiative in a March 20 press release. The commodity organization describes the salvage benefit as a significant feature of crop insurance, which helps farmers recover some costs associated with quality issues. The new tiered system features higher coverage than 2018 levels – in the future, the farmers will receive compensation for DON-infected corn starting at 3 parts per million, with higher compensation for higher DON levels.
Markus Haerle, chair for GFO, thanked the federal and provincial governments for responding to feedback from the grain industry.
“The impact of high levels of DON in last year’s harvested corn demonstrates the need for Business Risk Management programming,” he said.
According to the government, the new corn salvage benefit is designed to build on previous government responses to the DON issue:
- Establishment of a research partnership with the Grain Farmers of Ontario looking at, among others, developing best management practices for in-season DON mitigation, as well as the effective management and storage of high-DON corn.
- Extension of the Commodity Loan Guarantee Program loan repayment deadline.
- Increase in the maximum guaranteed loan limit, on a pilot basis, from $120 million to $200 million for the 2019 and 2020 program years.
- Launch of a cost-share program to provide special assistance to farmers experiencing revenue loss over testing for DON.
The province has also hosted two roundtable sessions with industry focused on finding alternative markets, as well as connecting farmers with mental health support.
Marie-Claude Bibeau, federal Agriculture and Agri-Food minister, says the salvage program is another way the Canadian Agriculture Partnership is working to help farmers “access the tools and support that they need to overcome difficult situations and manage future risk.”
Ernie Hardeman, Ontario’s agriculture minister, acknowledged the “considerable challenges” faced by many corn growers in 2018.
“We want to help Ontario farmers and others working in our agricultural sector succeed, and we’ll keep working to find ways so they can be profitable and get ahead,” Hardeman said.
