Ontario Sheep looks into production insurance

The potential insurance plan would focus on production levels rather than price

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Ontario Sheep Farmers is investigating production insurance for its members that would help farmers guard against production declines.

Meetings were held across Ontario for producers from Sept. 10 to 12 to discuss the risks they face within their production systems, and for Ontario Sheep Farmers to grasp producer interest in a production insurance program.

“The need has been identified. Now, what would a program look like and how can we make it appealing to farmers and a workable thing? That’s really what we are doing — we are at the early stages of designing,” says Marc Carere, chair of Ontario Sheep Farmers board of directors.

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Why it matters: The sheep industry has limited access to programs that help mitigate risk.Currently there is no effective risk management tool available to producers to aid in production losses.

Sheep producers face production risks on a daily basis, whether disease, or low production numbers, which is why production insurance could help stabilize sheep farmer income.

“The general consensus is that production insurance is something that the sheep farmers are definitely interested in. There was a lot of discussion around what that might look like,” says Jennifer MacTavish, general manager for Ontario Sheep Farmers, following the producer meetings.

The organization hired Rick Allen and Mike Boyd with Watts and Associates from the United States to guide Ontario Sheep Farmers through the process.

“(Watts & Associates) is a consulting firm and they have done work in the field of insurance before for agriculture,” says MacTavish.

Currently Ontario sheep producers have coverage through the province’s Risk Management Program (RMP) which has been around for a number of years but Carere says it needs more tweaking.

“It’s been very effective but we know that it needs more tweaking and the Ministry of Agriculture has said pretty clear that we need to tweak it a bit, we need to make sure it retains its effectiveness and acts like an insurance program should,” says Carere.

Farm organizations have concerns that the $100 million total in the RMP isn’t enough to cover significant losses. The Conservative Party promised in the last election it would increase it by $50 million.

Ontario Sheep Famers are still trying to decide if the program should be in addition to the current RMP or be a part of it.

“This is what we are trying to do – bringing it down to that producer level to see what the demand would be and what programs would be desirable; it’s not a simple answer, it’s going to take some time,” says Carere.

The current RMP covers the price of commodities, but there is nothing that covers dramatic production declines. So if a farmer runs into a catastrophe and only has a yield of 75 per cent of their production, the price is covered, but the production volume is not.

There will be a couple of options provided to the Ontario Sheep Farmers board of directors on how the program will work.

Data collection is the next step in the process, and currently Ontario Sheep Farmers is looking to see what data is already available.

MacTavish says they received a lot of good feedback from farmers during the three meetings across Ontario.

“[Farmers] were very engaged, they asked a lot of good questions, they gave the consultants a lot of really good information about what matters to them, what risks they are concerned about what kind of coverage they would be looking for which is all going to be really important as part of the deliverable coming back to us,” says MacTavish.

About the author

Reporter

Jennifer lives on a farm in Cayuga, Ontario and has a lot of experience in the many aspects of agriculture.

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