Pick plans for fresh vegetables

48 

Loading....

Loading....

Loading....

Loading....

Loading....

Full text

(1)

Pick plans for fresh vegetables

Plan Overview

Fresh Market Vegetable Production

(2)

AbOut PRODuC tION INSuR ANCE

Agricorp administers Production Insurance (PI) on behalf of the Government of Ontario and Agriculture and Agri-Food Canada. Production Insurance is available for 90 commercially grown crops in Ontario in the following sectors:

• Forage • Fruit and honey • Grains • Oilseeds • Vegetables • Seed corn, sugar beets, hemp and tobacco

AbOut thIS PublIC AtION

The purpose of this overview is to provide general information about the fresh market vegetable plans available under Production Insurance. It includes plan-specific features, customers’ responsibilities, and general deadlines.

This plan overview contains general information only and does not represent an insurance contract. Information contained within it is subject to change.

Refer to the following for additional information about the PI plan for fresh vegetable crops:

1. Contract of Insurance

2. Production Insurance information sheets for the current plan year 3. Production Insurance documents:

• Pepper Salvage Benefit • FMV-AL Intended Crop Planting Sheet • FMV-AL Grading Standards • FMV-AL Insurable Values and Abandonment Thresholds For copies of these documents, visit agricorp.com or call Agricorp at 1-888-247-4999.

Plan overviews are also available for the following crops: • Grain and oilseed production

• Honey production

• Tree fruit and grape production

market vegetables under Production Insurance.

As an agency of the Government of Ontario, Agricorp works with

partners to contribute to a vibrant and sustainable agriculture

industry. We deliver programs that help producers manage risk

and remain financially secure.

(3)

Table of contents

SECtION I: Overview . . . 2

Why should I have Production Insurance?. . . 2

how do I get PI coverage? . . . 2

What types of insurance coverage are available?. . . 3

Which crops are covered under each plan?. . . 4

What are my responsibilities? . . . 6

SECtION II: Yield-based vegetable plans . . . 8

What are the plan details?. . . 8

how is PI coverage determined?. . . 13

Evan Farm Example I: Calculating AFY for new customers . . . 14

Evan Farm Example II: Yield buffering . . . 14

Evan Farm Example III: Determining guaranteed production . . . 15

how are PI premiums determined?. . . 16

Evan Farm Example IV: Calculating discount or surcharge . . . 17

Evan Farm Example V: Calculating annual premium . . . 18

What happens when a crop is damaged?. . . 18

Evan Farm Example VI: Calculating a production claim . . . 19

Evan Farm Example VII: Calculating a USAB claim . . . 20

Evan Farm Example VIII: Calculating a reseeding benefit claim. . . 21

Evan Farm Example IX: Calculating a pepper salvage benefit claim . . . 22

SECtION III: Dollar-value vegetable plans. . . 23

What are the plan details?. . . 23

how is PI coverage determined?. . . 24

Lynwood Enterprises Example I: Determining guaranteed production. . . 25

how are PI premiums determined?. . . 25

Lynwood Enterprises Example II: Calculating annual premium. . . 26

What happens when a crop is damaged?. . . 26

Lynwood Enterprises Example III: Calculating a production claim. . . 27

Lynwood Enterprises Example IV: Calculating a reseeding benefit claim . . . 28

SECtION IV: Fresh market vegetable acreage loss plan . . . 29

What are the plan details?. . . 29

Leigh Acres Example I: Choosing insurable values. . . 31

how is PI coverage determined?. . . 32

Leigh Acres Example II: Calculating total insurable value . . . 32

how are PI premiums determined?. . . 33

Leigh Acres Example III: Calculating annual premium . . . 33

What happens when a crop is damaged?. . . 34

types of claims . . . 34

Leigh Acres Example IV: Calculating a special protection claim . . . 38

(4)

SECtION I:

Overview

Why should I have Production Insurance?

As a producer, you have to deal with many factors that are beyond your control. Things like adverse weather, disease, wildlife, and insect infestations can have a serious impact on your production and your income.

Production Insurance (PI) adds a measure of predictability to an unpredictable business. It protects your business from yield reductions and crop losses caused by insured perils. More than 16,000 Ontario producers with more than five million acres of farmland enjoy the financial security provided by PI.

Production Insurance helps you:

• Maintain your cash flow in poor crop years with claim payments that compensate you for crop damage or low yields

• Manage your operation with a more predictable cash flow • Provide collateral required to secure loans

• Stabilize your AgriStability program reference margin over time

• Gain affordable peace-of-mind by paying tax-deductible premiums that are cost-shared with government

the AgriStability and PI connection

AgriStability, which protects your farm against large margin declines, and PI are

complementary programs that address different risks faced by Ontario producers. Participating in both AgriStability and PI lets you maximize the benefits of government risk management programs available to you:

• PI claim payments count as income in calculating your AgriStability reference margin • Depending on weather and/or market conditions, in a given year you could receive an

AgriStability benefit, a PI claim – or both.

How do I get PI coverage?

New applications

If this is your first time applying, contact Agricorp at

1-888-247-4999. An Agricorp representative will

then visit you to review your coverage and claim price options and complete your application.

Renewals

If you already have PI coverage, a renewal notice will be sent to you in February that outlines your coverage based on your previous year’s policy.

See What are my responsibilities? on page 6 for application deadlines, coverage changes, or coverage cancellation.

(5)

What types of insurance coverage are available?

There are two basic types of Production Insurance for fresh market vegetables:

1. Total production coverage

2. Fresh market vegetable acreage loss (FMV-AL)

Total production coverage

Total production coverage insures the total planted acres of a given crop. If your actual yield is less than your guaranteed level of production, a production claim may be paid on the shortfall. Total production coverage offers these overall advantages:

• Multiple benefits

• Claim payments for incremental losses on the total acres grown (payment size depends on coverage level option selected)

Production Insurance offers two types of total production plans to choose from:

Yield-based vegetable plans

Your coverage is based on comparing your actual yields against an average of your historical yields for each individual crop. Advantages of this plan include:

• Multiple benefits: - Production claim - Unseeded acreage benefit - Reseeding benefit - Salvage benefit (bell and banana peppers only) • Coverage based on your own growing experience • Crop-specific coverage levels, claim prices, and premium rates • Buffering to smooth out extreme yield conditions • Potential for a premium discount, depending on how your claim history compares to the history of the plan

Dollar-value vegetable plans

Your coverage is based on a dollar value per acre that you select for each individual crop. Historical yields are not collected. Advantages of this plan include:

• Multiple benefits: - Production claim - Reseeding benefit • Crop-specific coverage levels, dollar values, and premium rates • Loss assessments before harvest • Claim payments for incremental losses on the total acres grown (payment size depends on the dollar value and coverage level option selected)

• Potential for a premium discount, depending on how your claim history compares to the history of the plan

A single crop cannot be insured under more than one type of plan.

(6)

Fresh market vegetable acreage loss plan

The fresh market vegetable acreage loss (FMV-AL) plan provides insurance coverage for major losses experienced at the field level. Losses are compared against predetermined abandonment thresholds, which are based on the crop yields required to meet production costs for a typical field of that crop. If your yield falls below the threshold level due to an insured peril, a claim may be paid.

Advantages of this plan include:

• Multiple benefits throughout the season: - Special protection claim - Emergency measures claim - Abandonment claim • Separate coverage for multiple plantings of short-season crops • Single-peril (hail or frost) coverage or combined hail and frost coverage

• Spot-loss protection (insurance coverage applies on a per acre basis, rather than total acreage) • Claims are paid at timely periods throughout the growing season

• In most cases, allows for crop salvage without affecting compensation

Which crops are covered under each plan?

CROP

YIElD-bASED

DOll AR-VAluE

FMV-ACREAgE lOSS

FRuIt lEAFY ROOt OthER

Asparagus

Broad beans

Broccoli

Brussels sprouts

Bok choy

Cabbage

Carrots

Cauliflower

Celeriac

Celery

Chinese cabbage

Cucumbers

Eggplant

French shallots

Gai lan

Garlic

Green and wax beans

For more detailed information on the differences between yield-based vegetable plans and FMV-AL plans, please see APPENDIX A: Comparison of plan types.

(7)

CROP YIElD-bASED

DOll AR-VAluE

FMV-ACREAgE lOSS

FRuIt lEAFY ROOt OthER

Green peas

Kale

Leeks

Lettuce

Melons

Mesclun

Mustard greens

Onions, seed

Onions, set

Onions, Spanish

Onions, yellow

Peppers, banana

Peppers, bell

Peppers, specialty

Parsnips

Potatoes

Pumpkins

Radishes

Red beets

Rutabagas

Spinach

Squash

Sweet corn

Sweet potatoes

Tomatoes

Turnips

Watermelons

Yu choy

Zucchini

The plan names may vary from the crop

(8)

What are my responsibilities?

Important dates

To ensure that your PI contract remains in good standing, please note these important dates and deadlines in the annual cycle of your insurance contract:

DESCRIPtION DAtE (YIElD-bASED) DAtE

(DOll AR-VAluE) FMV-Al POtAtOES AND ONIONS C ARROtS, PEPPERS, AND RutAbAgAS ASPAR AguS

Cancellation April 1 April 1 Oct. 30 April 1 May 1 Apply for coverage April 1 May 1 Oct. 30 May 1 May 1 Make changes to

coverage

April 1 May 1 Oct. 30 May 1 May 1 Unseeded Acreage Benefit (USAB): Apply and Notify Agricorp of 10 per cent increase in acreage April 1* *onions only April 1* *carrots only

N/A N/A N/A

File damage report for USAB and add new crops Up to planting deadlines* *onions only Up to planting deadlines* *carrots only

N/A N/A N/A

Report final planted acreage to Agricorp Within 10 days of planting or June 30, whichever comes first Within 10 days of planting or June 30 whichever comes first *except peppers - July 10 Oct. 30 As soon as planted – see page 23 for crop- specific planting deadlines See Acreage Reporting Dead-line table on

page 31 for crop specific deadlines

Pay premium July 10 July 10 April 15 July 10* *except broccoli, lettuce and cauliflower, for which premium is due upon completion of planting

Within 10 days of receipt of invoice

Harvest N/A October 15 for peppers only

N/A N/A Refer to the Planting Deadlines and Coverage Periods Production Insurance

(9)

good farm management practices

You are expected to use good farm management practices at all times. If you use practices that contribute to a production loss, you may lose some or all of your insurance coverage.

Changes to your business structure

If you make changes to your business structure, including changes to name, address, or shareholders, you must report them to Agricorp by May 1 of the insurance year.

Reporting damage

You must report all crop damage as soon as it occurs. An Agricorp adjuster may visit your farm to inspect the damage for the purposes of your claim. Failing to report damage as soon as it occurs may cause your claim to be denied.

You must report to Agricorp in advance any significant changes in the scale of your operation or the farm

(10)

SECtION II:

Yield-based vegetable plans

What are the plan details?

Insurable crops

The following vegetable crops are insurable under the yield-based vegetable plans: • Asparagus • Carrots* • Seed onions

• Banana peppers** • Potatoes* • Set onions • Bell peppers** • Rutabagas** • Spanish onions

* Fresh production only is insured under the yield based vegetable plan. Processing production is insured under a separate PI plan. For more information, refer to the publication, Production Insurance, Plan Overview,

Processing Vegetables.

** Both fresh and processing production is insured under the yield based vegetable plan.

Planting deadlines

In order to maintain your PI coverage, you must plant your crops by the following deadlines:

CROP Pl ANtINg DEADlINE

Asparagus N/A (perennial crop)

Seed onions and set onions May 15

Spanish onions May 20

Bell peppers and banana peppers June 15 Potatoes – Shepody and Snowden varieties June 21 Potatoes – all other varieties June 30 Carrots and rutabagas June 30

For crops where both fresh and processing production is insured under this plan, all acres of the crop must be insured. You cannot insure only fresh or only processing production.

(11)

Insured perils The yield-based vegetable plan provides coverage against these insured perils: CROP PERIl C OO l WEA th ER D R O ught Ex CESSIVE h EA t Ex CESSIVE MOIS tu RE Ex CESSIVE R AINF A ll Fl OOD F REE z E F R OS t hAI l INSEC t *INFES tA t ION Pl AN t *DISEASE SuNSC A l D W Il D l IFE W IND Asparagus

Bell peppers

Banana peppers

Carrots

Potatoes

Rutabagas

Seed onions

Set onions

Spanish onions

* Provided good farm management practices are followed

Coverage eligibility

A one-acre minimum is required to insure yield-based vegetable crops, except for fresh market potatoes and rutabagas, which require a minimum of three acres.

Asparagus

Coverage level options: 70, 75, 80, 85, 90 per cent.

Available coverage

Asparagus is eligible for total production coverage.

Special conditions

With asparagus, it is considered a good farm management practice to plant crowns rather than direct seed. Production insurance covers only asparagus plants that are at least four years of age (from crowns) or older.

Harvest duration will depend on the growing conditions in the year and the resilience of the crop. Your individual yield history is based on your historic harvest period. Typically, the harvest period is for six weeks. If your yield falls below your production guarantee due to immaturity or

(12)

Claim price

The claim price unit is in dollars per pound. The claim price is based on the five-year average price of fresh sales as reported by the Ontario Ministry of Agriculture and Food (OMAF), less an amount per pound for non-incurred costs (pack out and containers).

Banana pepper

Coverage level options: 70, 75 and 80 per cent.

Available coverage

Peppers are eligible for total production coverage, the reseeding benefit and the pepper salvage benefit. For more details on the pepper salvage benefit, see the Pepper Salvage Benefit Production Insurance Document. Also see an explanation and example on page 22.

Claim price

The claim price unit is in dollars per ton. There are three claim price options. The claim price is based on the Ontario Processing Vegetable Growers (OPVG) contract price for banana peppers, and green, multi-coloured and red bell peppers.

Bell pepper

Coverage level options: 70, 75 and 80 per cent.

Available coverage

Peppers are eligible for total production coverage, the reseeding benefit and the pepper salvage benefit. For more details on the pepper salvage benefit, see the Pepper Salvage Benefit Production Insurance Document. Also see an explanation and example on page 22.

Claim price

The claim price unit is in dollars per ton. There are three claim price options. The claim price is based on the Ontario Processing Vegetable Growers (OPVG) contract price for banana peppers, and green, multi-coloured and red bell peppers.

Carrots

Coverage level options: 65, 70, 75 and 80 per cent.

Available coverage

Carrots are eligible for total production coverage, as well as the unseeded acreage benefit and the reseeding benefit.

Early-harvest yield factoring

Your AFY for carrots is based on the harvested production of mature carrots. Factoring is designed to adjust your yield to account for carrots harvested before maturity. Early-harvest carrots are assigned a potential yield that is greater than or equal to your guaranteed

production. However, a lower potential yield may be applied if the Agricorp adjuster inspects the crop and believes the lower potential is due to damage incurred by an insured peril.

Claim price

The claim price unit is in dollars per 50 pound bag. The claim price is based on a fall packer survey and OMAFRA’s five-year average survey, less non-incurred costs.

(13)

Potatoes

Coverage level options: 70, 75, 80, 85 and 90 per cent.

Available coverage

Potatoes are eligible for total production coverage, as well as the reseeding benefit.

Early harvest yield factor for potatoes

Your AFY for potatoes is based on the harvested production of mature potatoes. Factoring is designed to adjust your yield to account for potatoes harvested before maturity. The maturity date is the last day of the Ministerial exemption on imported processing new crop potatoes in bulk. Factors are applied as follows:

FAC tORINg PERIODS

lENgth OF FAC tORINg PERIOD (DAYS) FAC tOR Ministerial exemption date 1 1.0000 1st period 3 2.0474 2nd period 7 1.5176 3rd period 7 1.2056 Last date 1 1.0000 Example:

If the Ministerial exemption date is July 10, potatoes harvested between July 11 and July 13 will be factored by 2.0474, July 14 to 20 harvests will be factored by 1.5176, and so forth.

Claim price

The claim price unit is in dollars per hundredweight. There are two claim price options based on a five-year average of fresh table stock potatoes, less non-incurred costs (trucking and board fees).

Rutabaga

Coverage level options: 70, 75 and 80 per cent.

Available coverage

Rutabagas are eligible for total production coverage, and the reseeding benefit.

Claim price

The claim price unit is dollars per ton. The claim price is based on the three year average indus-try price less non-incurred costs.

(14)

Seed onions

Coverage level options: 70, 75 and 80 per cent.

Available coverage

Seed onions are eligible for total production coverage, as well as the unseeded acreage benefit and the reseeding benefit.

Small onion conversion

A yield conversion is calculated when the grower is only in a claim position and the amount of small onions is greater than the natural occurrence of small onions of the total yield. The natural occurrence of small onion bags is 5 per cent of total yield. If the natural occurrence is greater than the actual number of small onions, the actual number of onions harvested is the yield to count. If the natural occurrence is smaller than the actual number of small onions, a conversion is required.

Total yield to count = actual number of large onions + converted number of small onions

Where:

converted number of small onions = natural occurrence of small onions + (actual number of small onions – natural occurrence of small onions) x 0.40

Claim price

The claim price unit is dollars per 50 pound bag. The claim price is based on a fall packer survey and OMAF’s five-year average survey, less non-incurred costs.

Set onions

Coverage level options: 70, 75 and 80 per cent.

Available coverage

Set onions are eligible for total production coverage, as well as the unseeded acreage benefit and the reseeding benefit.

Claim price

The claim price unit is dollars per 50 pound bag. The claim price is based on a fall packer survey and OMAF’s five-year average survey, less non-incurred costs.

Spanish onions

Coverage level options: 70, 75 and 80 per cent.

Available coverage

Spanish onions are eligible for total production coverage, as well as the unseeded acreage ben-efit and the reseeding benben-efit.

Irrigation is required to participate in the Spanish onion plan.

Claim price

The claim price unit is dollars per 50 pound bag. There are two claim price options. The claim price is based on the processor price less non-incurred costs.

This is not available for Spanish onions because drought is the main peril contributing to onions

size and irrigation is required for eligibility.

(15)

How is PI coverage determined?

The following factors are used to determine how much damage you are protected against from insured perils: • Average farm yield

• Coverage level

• Guaranteed production

Average farm yield

Agricorp calculates an average farm yield (AFY) that is used as a benchmark to determine if your actual production is below your historical average for insurance purposes.

AFY for existing plan participants

Your AFY is calculated using up to the past 10 years of your actual reported yields.

AFY for new plan participants

If you are new to the PI plan, each crop is assigned an underwritten five-year AFY that is based on: • Soil type • Drainage • Township averages • Plan averages • Historical data • Management experience and practices

Each year that you participate in the plan, your actual yield replaces an underwritten yield until your AFY is composed entirely of your own actual yields.

Yield reporting

An Agricorp adjuster will visit your farm after harvest to collect your actual yield information and/or measure your stored crop harvested from the field. Information on your sales may also be audited to verify your yield.

Yield buffering

Unusually high and low yields are buffered to stabilize and lessen the impact of extreme yields on your AFY:

• The upper threshold is 130 per cent of your AFY. If your actual yield is above the upper threshold, the yield is buffered two-thirds of the way down to the upper threshold. • The lower threshold is 70 per cent of your AFY. If your actual yield is below the lower

threshold, the yield is buffered two-thirds of the way up to the lower threshold.

Coverage level

At the time of application or renewal, you choose a coverage level from one of several options available for each crop that affects both the amount of premium you pay as well as any potential claims you may receive.

If you grow asparagus, your initial under- written average farm yield is also based on whether hybrids and/or open pollinated varieties are grown, the age of plantings, your marketable yield history, and provincial and Agricorp aver-age yields.

Agricorp may adjust your AFY to reflect any substantial changes to your farm management practices or land base.

(16)

These numbers are the result of the calculations that follow.

Guaranteed production

Your guaranteed production is determined by multiplying your AFY by your selected coverage level. If an insured peril causes your actual yield to fall below your guaranteed production, a production claim may be paid on the difference.

Evan Farm Example I: Calculating AFY for new customers

Evan Farm is a seed onion producer that is applying for PI for the first time.

Year 1: Agricorp assigns Evan Farm a five-year beginning AFY of 784 bags per acre (where one

bag of onions weighs 50 pounds).

Year 2: Evan Farm’s actual yield for Year 1 was 800 bags per acre. As a result, its AFY for Year 2 is

now based on one actual yield plus four underwritten yields, as follows:

AFY (Year 2) = 800 + (4 x 784)

5 =

3936

5 = 787.2 bags/acre

Year 3: The actual yield for Year 2 was 700 bags per acre. The AFY for Year 3 is now based on two

actual yields plus three underwritten yields, as follows:

AFY (Year 3) = 800 + 700 + (3 x 784)

5 =

3852

5 = 770.4 bags/acre

The AFY for following years is calculated in the same manner until all underwritten yields are replaced by actual yields starting in Year 6.

Evan Farm Example II: Yield buffering

Assume Evan Farm has now participated in the PI program for several years.

• In 2007, less than ideal growing conditions led to a very low yield. This extremely low yield is

buffered up for the purposes of calculating AFY.

• In 2010, ideal growing conditions led to a bumper crop. This extremely high yield is buffered

down for the purposes of calculating AFY.

The table below shows Evan Farm’s actual yields and the buffered yields for 2007 and 2010:

YEAR AC tuAl YIElD (bAgS PER ACRE)

buFFERED YIElD (bAgS PER ACRE)

2004 820 820 2005 750 750 2006 905 905 2007 60 371.68 2008 780 780 2009 880 880 2010 990 983.12 2011 810 810 2012 733 733 2013 808 808

(17)

Evan Farm’s upper and lower limit thresholds are calculated as follows:

Upper threshold = 130% x 753.60 bags/acre = 979.68 bags/acre

Lower threshold = 70% x 753.60 bags/acre = 527.52 bags/acre

The buffered yield would be calculated as follows:

Difference between actual

yield and the upper limit = = 990 - 979.68 10.32 Buffering adjustment (BA) =

= =

Difference between upper limit and actual yield x 2/3 10.32 x 2/3

6.88 bags per acre Buffered yield - 2004 =

= =

Actual yield - BA 990 - 6.88

983.12 bags per acre

Difference between lower

limit and actual yield = = 527.52 - 60467.52 bags per acre Buffering adjustment (BA) =

= =

Difference between lower limit and actual yield x 2/3 467.52 x 2/3

311.68 bags per acre Buffered yield - 2001 =

= =

Actual yield + BA 60 + 311.68

371.68 bags per acre

This buffered yield is then used in calculating your average farm yield.

Evan Farm Example III: Determining guaranteed production

Evan Farm selects the highest coverage available for seed onions at 80 per cent. The guaranteed production (GP) per acre is determined as:

gP = AFY x coverage level = 784.08 bags/acre x 80% = 627.26 bags/acre

If an insured peril causes Evan Farm to harvest fewer than 627.26 bags per acre in 2014, a production claim may be paid.

(18)

How are PI premiums determined?

Your annual premium calculation is based on: • Base premium rate

• Discount or surcharge • Final reported acreage

Base premium rate

Base premium rates are determined annually at the time of renewal. Rates may change based on factors like past performance of the plan, changes to claim price and the level of the Production Insurance Reserve Fund.

Discounts and surcharges

If you have been enrolled in a PI plan for more than one year, your premium rate may be discounted or surcharged. Discounts and surcharges are determined by comparing your individual claim rate to the claim rate for the crop plan as a whole:

• If your individual claim rate is greater than the claim rate for the crop plan, you may have a surcharge applied to your premium.

• If your individual claim rate is less than the claim rate for the crop plan, you may have a discount applied to your premium.

The claim rate measures the total dollar value of all claims paid, as a percentage of the total insured liability. Liability is the total guaranteed production value of the insured crop multiplied by the claim price, or the amount your PI would pay if you had a total crop loss.

Your individual claim rate takes into account the total value of all the claims you have received and the total liability you have insured during your enrolment in the plan. The claim rate for the plan takes into account the value of all claims and the total liability insured over the years that the plan has been in existence.

C AlCul AtINg DISCOuNt OR SuRChARgE

Discount or

surcharge percentage = 100 x

# of years enrolled in plan

x

(

individual claim rate – 1

)

25 plan claim rate

Notes:

• There is no discount or surcharge for asparagus or FMV-AL.

• The maximum annual discount or surcharge is capped at +/- 25 percent of the base rate premium (excluding cauliflower, cabbage, and broccoli, which have an unlimited annual discount or surcharge).

A premium discount or surcharge applies to yield-based and dollar- value vegetable plans.

(19)

Evan Farm Example IV: Calculating discount or surcharge

Assume the plan claim rate is constant over the next 10 years. The individual accumulated liability increases given the AFY for each year over time. All growers start off with no discount or surcharge. Evan Farm does not have any claims the first three years of Production Insurance so it receives a discount every year. In the fourth year of production, Evan Farm has a claim of $146,720. In turn, this claim moves the farm from the previous year’s 8 per cent discount to a 9.71 per cent surcharge.

YEAR YEARS OF ENROl. CuStOMER’S ACCuMul AtED lIAbIlIt Y CuStOMER’S ACCuMul AtED Cl AIMS CuStOMER’S Cl AIM R AtE (%) Pl AN Cl AIM R AtE (%) CuStOMER’S DISCOuNt (-) OR SuRChARgE (+) 2005 0 156,800 NIL 0.00 12.8 0.00 2006 1 315,040 NIL 0.00 12.8 -4.00 2007 2 471,920 NIL 0.00 12.8 -8.00 2008 3 633,640 146,720 23.16 12.8 9.71 2009 4 778,868 146,720 18.84 12.8 7.55 2010 5 923,936 146,720 15.88 12.8 4.81 2011 6 1,074,158 146,720 13.66 12.8 1.61 2012 7 1,231,010 146,720 11.92 12.8 -1.93 2013 8 1,387,576 146,720 10.57 12.8 -5.58 2014 9 1,543,656 146,720 9.50 12.8 -9.28

Over the past nine years, Evan Farm insured $1,543,656 in liability and received $146,720 in seed onion claims. As a result, the farm would receive a discount of 9.28 per cent.

Since Evan Farm’s individual claim rate is less than the claim rate for the plan, it would receive a discount:

For calculating annual premiums, this percentage translates to a discount of 0.9072 (100% - 9.28% = 90.72%). Discount or surcharge percentage = 100 x 9 x

(

9.50% – 1

)

25 12.80% = -9.28%

A small claim may have little or no effect on your discount or surcharge. In a year when many other plan participants are also in a claim situation, even a large claim may have little impact on your

(20)

Cost sharing

Once you report your number of eligible acres, an invoice will be sent to you for your portion of the annual premium.

• The federal and provincial governments contribute up to 60 per cent of the annual premium.

• Your annual premium does not include any fees for administrative costs, which are funded entirely by the provincial and federal governments.

Evan Farm Example V: Calculating annual premium

For the current crop year, the base premium rate at 80 per cent coverage is $184.05/acre for seed onions. Evan Farm reported 50 acres.

As calculated in Example IV, Evan Farm has a premium discount of 9.28 per cent. The annual premium (AP) for Evan Farm is calculated as:

AP = number of acres x base premium rate x discount/surcharge = 50 x $184.05 x 0.9072

= $8,348.51

Final reported acreage

You must report your planted acres to Agricorp by the deadlines specified in What are my responsibilities on page 6.

What happens when a crop is damaged?

Reporting damage

You must report damage as soon as it occurs by calling Agricorp at 1-888-247-4999, Monday to Friday, from 7 a.m. to 5 p.m. If you do not report damage immediately, your claim could be denied.

Claim eligibility

You must meet the obligations outlined in the section

What are my responsibilities? on page 6.

Specific eligibility criteria for different claim types are as follows:

1. Production Claims

Production claims cover reductions in yield caused by insured perils. Agricorp may pay a claim if: i. Damage was reported to Agricorp before harvest;

ii. Yield loss was due to an insured peril; and

iii. Your declared yield falls below your guaranteed value.

A claim is paid if an insured peril causes your yield to fall below your guaranteed production.

The minimum annual customer premium is $100 per crop and $150 per crop for bell peppers and banana peppers.

Report your acres as accurately as possible. Any discrepancies in acreage at the time of a claim may result in a decreased payment.

To be eligible for a claim, you must report damage to Agricorp before harvest so an adjuster can complete the required crop inspection.

(21)

Evan Farm Example VI: Calculating a production claim

In Example II, the guaranteed production for Evan Farm was calculated as 627.26 bags per acre. Based on 50 reported acres, their total guaranteed production is 31,363 bags.

For the current crop year, excessive rainfall and disease resulted in an actual reported yield of 50 bags per acre, or a total harvested yield of 2,500 bags. The production shortfall (PS) is calculated as:

PS = total guaranteed production - actual reported yield = 31,363 - 2,500

= 28,863 bags

Based on an example claim price for seed onions of $5.00 per bag, the claim payable (CP) is calculated as:

CP = production shortfall x claim price = 28,863 bags x $5.00 per bag = $144,315

2. unseeded acreage benefit (carrots, seed onions, set onions, and Spanish onions only)

The unseeded acreage benefit (USAB) provides compensation if an insured peril other than drought prevents you and a large number of other growers in the same area from planting or seeding all or part of your acreage.

Claim payments are based on the dominant crop you grew in the previous year. If you grew the same number of acres of two different crops, a priority list is used to determine your dominant crop.

To qualify for USAB, you must insure all of your acreage of carrots, seed onions, set onions and/or Spanish onions.

The amount of a USAB claim is determined by the following factors:

Claim price The claim price is a predetermined dollar amount per bushel or pound that Agricorp sets for each crop.

Average farm yield (AFY) A USAB claim is based on one-third of your AFY for the current plan year.

Deductible Claims are subject to deductibles whether the unseeded land is tiled or untiled:

• The deductible for tiled land is the greater of one per cent or three acres of land still unseeded.

• The deductible for untiled land is the greater of three per cent or six acres of land still unseeded.

The deductible is removed from the number of unseeded acres to determine the number of eligible acres for the USAB.

Per acre charge A one-dollar per-acre charge is applied to the number of unseeded acres, instead of an additional premium for this benefit.

(22)

The USAB benefit is calculated as:

uSAb = [claim price x 1/3 AFY x (total unseeded acreage – deductible)] - [one dollar x total unseeded acreage]

To qualify for USAB for onions, you must insure all your fresh market carrots, seed onions, set onions, and Spanish onions and apply for USAB before April 1, of the current crop year.

Evan Farm Example VII:

Calculating a USAB claim

After excessive rainfall prevents planting until well past the May 15 deadline for seed onions, Evan Farm is only able to plant 40 of the 50 acres it intended. The unseeded acreage consists of tiled muck land. The table in Example II shows Evan Farm’s AFY for the current year is 784.08 bags per acre. The example claim price for seed onions is $5.00 per bag. Since there are 10 acres of unseeded tiled land, a three-acre deductible is applied.

The USAB claim is calculated as:

uSAb = (claim price x 1/3 AFY x # eligible acres) - (one dollar x total unseeded acres) = ($5.00 x 261.36 x 7) – ($1.00 x 10)

= $9,147.60 - $10.00 = $9,137.60

3. Reseeding benefit

A reseeding benefit is paid if you have to reseed some or all acres of your crop due to an insured peril. The maximum benefit is based on a per-acre benefit rate that Agricorp sets for each crop. The reseed benefit consists primarily of seed or transplants, tillage, and planting costs. For some crops, like onions, insecticide costs are included in the benefit up to a maximum amount. Agricorp sets crop-specific maximum values for each reseed or replant activity.

Reseed benefit = damaged acres x reseed value/acre*

* If your actual receipts are less than the Agricorp maximum, the lower value is paid.

To qualify, you must:

• Contact Agricorp to open a claim before you reseed, AND

• Once authorized, finish reseeding by the planting deadline for your area.

The minimum acreage eligible for reseeding or replanting is three adjoining acres for fresh market potatoes and rutabagas, and one adjoining acre for all other vegetables.

The deadline to apply for USAB is April 1. See What are my responsibilities? on page 6 for other important USAB deadlines.

If you are planning on in-creasing last year’s planted acres by 10 per cent or more, you must contact Agricorp by April 1. If you do not report your increased acreage, you could be denied benefits on some or all of any unseeded acres.

Refer to the current year’s information sheet from your renewal package

or agricorp.com for

(23)

Evan Farm Example VIII: Calculating a reseeding benefit claim

Evan Farm reports damage on May 1 for excess moisture and flooding. Direct-seeded onions at the flag leaf stage are damaged in low-lying areas. An Agricorp adjuster measures a total of four acres damaged.

Agricorp’s reseed values for seed onions are as follows:

REPl ANt AC tIVIt Y RESEED VAluE ($/ACRE)

Tillage $22.00

Planting $80.00

Maximum seed cost $838.50 Herbicide/insecticide $75.00

total reseed value

($/acre) $1,015.50

Evan Farm’s reseed values for seed onions are as follows:

REPl ANt AC tIVIt Y RESEED VAluE ($/ACRE)

Tillage $22.00

Planting $80.00

Evan Farm actual

seed cost $780.00

Herbicide/insecticide $75.00

total reseed value

($/acre) $957.00

Evan Farm’s seed invoices show seed expenses of $780 per acre for reseeding, which is less than Agricorp’s maximum. As a result, the reseeding benefit (RB) is calculated using Evan Farm’s values, as follows:

Rb = damaged acres x total reseed value/acre = 4 acres x $957/acre

(24)

4. Pepper salvage benefit (banana and bell peppers only)

The salvage benefit compensates you for wages and related labour costs plus 30 per cent, up to a maximum of $250 per acre. The combined value of any salvage and production claims cannot exceed the total liability for the contract. The salvage benefit is calculated as:

Salvage benefit = total labour cost + 30 per cent

To qualify, you must meet all of the following conditions: i. Damage must have occurred to at least half of an

acre on or before August 1 for banana peppers and on or before August 15 for bell peppers;

ii. Fungicides must be applied in accordance with good farm management practices; and

iii. You must notify Agricorp as soon as the damage occurs. An Agricorp adjuster will inspect the crop to assess the severity of the damage, confirm the cause, and assess a potential yield.

Evan Farm Example IX: Calculating a pepper salvage benefit claim

Evan Farm decides to plant 15 acres of bell peppers under contract with a processor. When a hailstorm on August 4 causes crop damage, the grower immediately contacts Agricorp to open a damage report.

An Agricorp adjuster visits Evan Farm and agrees they are eligible for a salvage benefit on ten acres. The processor has given written permission to proceed with the salvage work. They employ 46 labourers at $10 per hour to remove the damaged peppers in 10 hours. The maximum allowable pepper salvage benefit is $250 x 10 acres = $2,500.

The salvage benefit (SB) calculation for Evan Farm is:

Sb = total labour cost + 30 per cent = (46 x $10 x 10) + (.30 x46 x $10 x 10) = $5,980

Evan Farm would therefore receive the maximum allowable salvage benefit of $2,500.

If the crop is grown under contract with a processor, the processor must provide written permission before the salvage work begins.

(25)

SECtION III:

Dollar-value vegetable plans

What are the plan details?

Insurable crops

The following vegetable crops are insurable under the dollar-value vegetable plan: • Broccoli** • Celery ** • Sweet corn*

• Cabbage** • Lettuce** • Tomatoes* • Cauliflower** • Parsnips**

* Fresh production only. Processing production is insured under a separate PI plan. For more information about insuring processing vegetables, refer to the publication, Production Insurance, Plan

Overview, Processing Vegetables.

** Both fresh and processing production is insured under the dollar-value vegetable plan.

Coverage eligibility

A one-acre minimum is required for insurance under the dollar-value vegetable plans.

Planting deadlines

To maintain your PI coverage, you must plant your crops by the following deadlines:

CROP Pl ANtINg DEADlINE

Tomatoes June 15

Cabbage, celery, parsnips and sweet corn June 30

Cauliflower July 25

Broccoli (fresh) and lettuce August 1 Broccoli (processing) August 14

(conditions apply, see inset below)

Planting deadline extension for processing broccoli

If you grow broccoli for processing, you may be able to plant up until August 14 if all of the following conditions are met:

i. You have a processing contract for the broccoli; ii. The processing broccoli is planted in an area

with greater than 2,400 heat units; iii. Acres can be irrigated;

For crops where both fresh and processing production is insured under this plan, all acres of the crop must be insured. You may not choose to insure only fresh or only processing production.

You must call Agricorp before August 1 if you are planning to plant processing broccoli after the regular August 1 deadline.

(26)

Insured perils The dollar-value vegetable plan provides protection against these insured perils: • Drought • Hail • Excessive heat* • Insect infestation** • Excessive rainfall • Plant diseases** • Flood • Wildlife • Frost • Wind • Freeze

* Except lettuce and sweet corn.

** Provided good farm management practices are followed.

Coverage level options

You choose a coverage level of 65, 70, 75, or 80 per cent.

Dollar-value options

You choose from one of the following available dollar-value options:

CROP DOll AR VAluE PER ACRE

MINIMuM MAxIMuM Broccoli $937 $1,875 Cabbage $1,125 $2,250 Cauliflower $1,500 $3,000 Celery $2,000 $4,000 Lettuce $900 $1,800 Parsnips $900 $1,800 Sweet corn $350 $700 Tomatoes $1,875 $3,750

How is PI coverage determined?

Under the dollar-value vegetable plan, crops are insured on the basis of a dollar value per acre for the total number of acres planted.

Guaranteed production

Your guaranteed production is determined by multiplying the chosen dollar value (per acre) by your chosen coverage level. If your actual production falls below your guaranteed production, a claim may be paid.

(27)

Lynwood Enterprises Example I: Determining guaranteed production

Lynwood Enterprises is renewing its PI coverage under the dollar-value plan. It selects a dollar value of $3,000 per acre and a coverage level of 80 per cent for its cauliflower crop. The guaranteed production (GP) per acre is determined as:

gP = selected dollar value per acre x coverage level = $3,000 x 80%

= $2,400 per acre

If an insured peril causes Lynwood Enterprises to harvest less than $2,400 per acre, a production claim may be paid.

How are PI premiums determined?

Your annual PI premium calculation is based on: • Base premium rate

• Discount or surcharge • Final reported acreage • Guaranteed production

Base premium rate

Base premium rates are calculated by Agricorp as a percentage of liability. Rates are determined annually at the time of renewal and may change based on factors like past performance of the plan and the level of the Production Insurance Reserve Fund.

Discounts and surcharges

If you have been enrolled in a dollar-value vegetable plan for more than one year, your premium rate may be discounted or surcharged. Discounts and surcharges are determined by comparing your individual claim rate to the claim rate for the crop plan as a whole.

Final reported acreage

You must report acres as soon as you finish planting. To be eligible for insurance, you must finish planting by the deadlines specified in What are my responsibilities? on page 6.

Guaranteed production

Your guaranteed production is determined by multiplying your selected dollar value per acre by your chosen coverage level.

Your per acre premium (AP or P/A) is then determined by multiplying your guaranteed production by your base premium rate and your discount or surcharge.

For more detailed information about surcharges and discounts, see page 15. Surcharges and discounts are treated the same for dollar-value vegetable plans as for yield-based vegetable plans. There is no discount available for FMV-AL plans.

Report your acres as accurately as possible. Any discrepancies in acreage at the time of a claim may reduce your payment.

(28)

Cost sharing

Once you report your acres, an invoice will be sent to you for your portion of the annual premium.

• The federal and provincial governments contribute up to 60 per cent of the annual premium.

• Your annual premium does not include any fees for administrative costs, which are funded entirely by the provincial and federal governments.

Lynwood Enterprises Example II: Calculating annual premium

Recall that Lynwood Enterprises selected a dollar value of $3,000 per acre and a coverage level of 80 per cent. For the current crop year, the example base premium rate at 80 per cent coverage is 6.79 per cent.

Assume Lynwood Enterprises has a premium discount of 5.21 per cent, which translates to 0.9479 for calculation purposes. The premium per acre (P/A) is calculated as:

P/A = guaranteed production x (base premium rate x discount/surcharge) = $3,000 x 80% x 0.0679 x .9479

= $154.46 per acre

Lynwood Enterprises reported 20 acres of cauliflower. The annual premium (AP) is calculated as:

AP = premium per acre x reported acres = $154.56 x 20

= $3,091.20

What happens when a crop is damaged?

Reporting damage

You must report damage to Agricorp as soon as it occurs by calling 1-888-247-4999, Monday to Friday from 7 a.m. to 5 p.m.

Claim eligibility

You are expected to meet the obligations outlined in the section What are my responsibilities? on page 6.

Specific eligibility criteria for different claim types are as follows:

1. Production claims

Production claims cover reductions in yield caused by insured perils. Agricorp may pay a claim if: i. Damage was reported to Agricorp before harvest;

ii. Yield loss was due to an insured peril; and

iii. Your total harvestable value falls below your total guaranteed production.

A claim is paid if an insured peril causes your value to fall below your total guaranteed production.

The minimum annual premium is $100 per crop plan. To be eligible for a claim, you must report damage to Agricorp before harvest so an adjuster can complete the required crop inspection. Each crop must be reported separately.

(29)

Lynwood Enterprises Example III: Calculating a production claim

Lynwood Enterprises reports excessive rainfall damage. Recall that the farm selected a dollar value per acre of $3,000. In Example I, the guaranteed production for Lynwood Enterprises was calculated as $2,400 per acre. Based on 20 reported acres, their total guaranteed production is $48,000.

The table below shows the assessed damage for each separate area of the field:

AREA DAMAgED ACRES (A) PERCENtAgE DAMAgED (b) tOtAl COVER AgE DV* x (A) tOtAl DOll AR lOSS DV* x (A) x (b) hARVEStAblE VAluE (tOtAl COVER AgE - tOtAl DOll AR lOSS)

1 4.5 25% $13,500 $3,375 $10,125

2 6.5 47% $19,500 $9,165 $10,335

3 3.0 60% $9,000 $5,400 $3,600

4 6.0 10% $18,000 $1,800 $16,200

total $40,260

* DV = dollar value per acre of $3,000

Based on the data calculated in the table, the claim payable (CP) is calculated as:

CP = total guaranteed production - total harvestable value = $48,000 - $40,260

= $7,740

2. Reseeding benefit

A reseeding benefit is paid if you have to reseed some or all acres of your crop due to an insured peril. The maximum benefit is based on a per-acre benefit rate that Agricorp sets for each crop.

The reseed benefit consists primarily of seed or transplants, tillage, and planting costs. Agricorp sets crop-specific maximum values for each reseeding or replanting.

Reseed benefit = damaged acres x reseed value/acre*

*If your actual receipts are less than the Agricorp maximum the lower value is paid.

To qualify, at least one acre must be damaged, and you must: • Contact Agricorp to open a claim before you reseed,

AND

• Once authorized, finish reseeding by the planting deadline for your area.

The minimum acreage eligible for reseeding or replanting dollar-value vegetables is one acre.

Refer to the current year’s information sheet from your renewal package or available at agricorp.com

for current reseeding benefit rates. Reseeding benefits

(30)

Lynwood Enterprises Example IV: Calculating a reseeding benefit claim

Lynwood Enterprises opens a reseed claim before the planting deadline because its newly planted cauliflower transplants were damaged by hail. An Agricorp adjuster measures a total of four acres damaged.

Agricorp’s reseed values for transplanted cauliflower are as follows:

REPl ANt AC tIVIt Y RESEED VAluE ($/ACRE)

Tillage $22.00

Planting $232.50

Maximum seed cost $250.00

Plug cost $292.50

total Reseed Value

($/acre) $797.00

Lynwood Enterprises’ reseed values for cauliflower are as follows:

REPl ANt AC tIVIt Y RESEED VAluE ($/ACRE)

Tillage $22.00

Planting $232.50

Maximum seed cost $275.00

Plug cost $300.00

total reseed value

($/acre) $829.50

Lynwood Farm’s seed and plug cost show $275.00 and $300.00 from invoices which are greater than Agricorp’s maximum amount. As a result, the reseeding benefit (RB) is calculated using Agricorp’s maximum reseed values.

The reseeding benefit (RB) is calculated as:

Rb = damaged acres x total reseed value/acre = 4 acres x $797.00/acre

(31)

SECtION IV:

Fresh market vegetable acreage loss plan

What are the plan details?

Insurable crops

The following vegetable crops are insurable under these four FMV-AL plans: Root vegetables • Carrots • Celeriac • French shallots • Garlic • Green onions • Leeks • Parsnips • Radishes • Red beets • Rutabagas • Spanish onions • Sweet potatoes • Turnips • Yellow onions leafy vegetables • Bok choy • Broccoli • Brussels sprouts • Cauliflower • Celery • Chinese cabbage • Gai lan • Kale • Lettuce • Mesclun • Mustard greens • Spinach • Summer cabbage • Winter cabbage • Yu choy Fruit vegetables • Cucumbers • Eggplant • Melons • Bell and specialty peppers • Pumpkins • Squash • Tomatoes • Watermelon • Zucchini Other vegetables • Broad beans • Green and wax beans • Green peas • Sweet corn Coverage eligibility To be eligible for the FMV-AL PI plan, all of the following conditions must be met:

i. You must have a minimum of two acres per crop class and insure all acres of that crop;

ii. You must insure all crops within the same crop grouping (e.g. if you insure three acres of onions and grow two acres of carrots you must also insure the carrots);

iii. You must plant or seed the acreage by the planting deadlines specified in the current year’s information sheet from your renewal package or available at

agricorp.com;

iv. If you plant the acreage before you apply for PI, your coverage must first be approved by Agricorp.

Organic production

Organic carrots and cabbage can be insured separately. To be eligible for organic coverage, the land you grow the crop on must be certified for the current

Failure to provide any requested production records can result in the loss of a claim. A single crop in a crop grouping may be insured individually if the crop covers an area of ten acres or more. If you want to insure additional crops in the same grouping, you must insure all (not just some) of the other crops in that grouping. You can insure organic

crops as conventional. However, damage caused by perils that are

(32)

Peril options

Under the FMV-AL plans, you can choose one of four peril options:

1. Multi-peril coverage

This peril option provides protection against these insured perils: • Drought* • Frost • Tornado

• Excessive heat • Hail • Wildlife‡

• Excessive moisture • Insect infestation**‡ • High winds • Excessive rainfall • Plant diseases**†‡

• Flooding • Snow

* Except Spanish onions.

‡ From which there is no adequate means of protection. ** Not insured perils for double cropped zucchini.

† Not an insured peril for crops grown on re-used plastic mulch.

2. Single-peril coverage for hail only 3. Single-peril coverage for frost only 4. Combined coverage for hail and frost Coverage level options

You choose from one of the following available cover-age levels to suit your individual risk

management needs:

PERIl OPtION AVAIl AblE COVER AgE lE VElS

60% 70% 80% 85%

Multi-peril

Hail only

Frost only

Hail and Frost

Insurable value options

For each crop, you choose one of three insurable value options that are expressed in dollars per acre. The insurable value is the basis of your premium and any abandonment claim you may receive.

Coverage period

To be eligible for insurance, you must finish planting by the latest planting date specified by Agricorp. The coverage period varies by crop. For specific planting deadlines and coverage period dates, refer to the

current year’s Planting Deadlines and Coverage Period sheet on agricorp.com.

For specific insurable option values and abandonment threshold levels, refer to the

Intended Crop Planting Sheet con-tained in your renewal package or available by contacting Agricorp. If you have insurable

crops in two different plans (e.g. root and leafy) you can select

different plan design options for each plan (e.g. multi-peril coverage for root vegetables and hail-only coverage for leafy vegetables).

(33)

Acreage Reporting Deadlines

You must report your acreage within 10 days of planting or by the acreage reporting deadline below, whichever comes first. Acreage reporting deadlines under the FMV-AL plans fall on one of three dates, depending on the crop.

Pl AN ACREAgE REPORtINg DEADlINE

JulY 15 or completion of planting, whichever comes first AuguSt 15 or completion of planting, whichever comes first SEPtEMbER 15 or completion of planting, whichever comes first

Fruit All crops

Leafy Brussels sprouts, cauliflower (seeded), celery, kale, and cab-bage

Broccoli, cauliflower (transplanted), Chinese cabbage, lettuce and spinach

Bok choy, gai lan, musclun, mustard greens, baby spinach, yu choy

Root All except radishes Radishes

Other All crops

At renewal or application, you are required to complete a farm diagram identifying fields and farms. When you report your acreage, please use this diagram to report your acreage by farm number and field number.

Acreage changes

If loss or damage occurs to an insured crop, you cannot abandon, destroy, reseed, replant,

harvest or use the acreage for another purpose without consent from Agricorp. You must take all reasonable steps to prevent further damage to the crop and other insured crops until Agricorp releases the acreage.

Leigh Acres Example I: Choosing insurable values

Leigh Acres grows carrots, yellow onions, and spinach. The insurable value options for these crops for the current plan year are as follows:

C AtEgORY CROP Cl ASS OPtION 1 ($/AC)

OPtION 2 ($/AC)

OPtION 3 ($/AC)

Root vegetables Carrots (mineral soil) $1,300 $1,040 $780 Root vegetables Yellow onions

(mineral soil) $2,000 $1,300 $1,200

Leafy vegetables Spinach $1,100 $880 $660

Leigh Acres chooses insured values of $1,040 for carrots, $2,000 for yellow onions, and $1,100

Report your acres as accurately as possible. Any discrepancies in acreage at the time of a claim may reduce your payment.

(34)

How is PI coverage determined?

Under the FMV-AL plans, your coverage is determined by calculating the total insurable value.

total insurable value = insured value by crop class x number of acres of crop class

To calculate the total insurable value for a crop, multiply the insured value you selected by the number of acres of that crop.

The total insurable values for each crop class (e.g. carrots, onions) within each plan (e.g. root vegetables) are added together to determine your total coverage for each plan.

Leigh Acres Example II: Calculating total insurable value

Recall that Leigh Acres grows carrots, onions, and spinach. Based on the insurable values for each crop in Leigh Acres Example I, the total insurable values are as follows:

C AtEgORY CROP Cl ASS ACRES (A) INSuR AblE VAluE (b) ($ PER ACRE) tOtAl INSuR-AblE VAluE (A x b) Root vegetables Carrots (mineral soil) 20 $1,040 $20,800

Root vegetables Yellow onions

(mineral soil) 15 $2,000 $30,000

total $50,800

Leafy vegetables Spinach 15 $1,100 $16,500

total $16,500

Criteria for high density vegetables

Agricorp offers high density coverage to reflect the differences in production techniques in Ontario horticulture. High-density broccoli, celery, peppers, Spanish Onions and zucchini can be insured separately. To quality, the planting density of crops must meet or exceed the values in the following table:

hIgh DENSIt Y CROP MINIMuM NuMbER OF Pl ANtS/ACRE

Bell peppers and

specialty peppers 17,000 Zucchini, on mulch and

zucchini, transplanted on mulch

8,250

Broccoli, transplanted 25,000

(35)

How are PI premiums determined?

Your annual PI premium is determined as a percentage of the total insurable value. The percentage used is a base premium rate set by Agricorp.

Premium = total insurable value x base premium rate

Base premium rate

Base premium rates are determined annually at the time of renewal. Rates may change based on factors like past performance of the plan, changes to

threshold levels, and the level of the Production Insurance Reserve Fund.

Cost sharing

Once you report your eligible acres, an invoice will be sent to you for your portion of the

annual premium.

• The federal and provincial governments contribute up to 60 per cent of the annual premium.

• Your annual premium does not include any fees for administrative costs, which are funded entirely by the provincial and federal governments.

Leigh Acres Example III: Calculating annual premium

Under the root vegetable plan, Leigh Acres selects a multi-peril option with an 80 per cent cover-age level. The example base premium rate is 4.19 per cent.

Under the leafy vegetable plan, Leigh Acres selects a hail-only option with an 85 per cent cover-age level. The example base premium rate is 0.78 per cent.

Using the combined total insurable value of $50,800 for carrots and onions determined in Example II, the annual premium for root vegetables (APRV) is calculated as:

APRV = total insurable value by crop x base premium rate = $50,800 x 4.19%

= $2,128.52

Using the $16,500 total insurable value for spinach determined in Example II, the annual premium for leafy vegetables (APLV) is calculated as:

APlV = total insurable value by crop x base premium rate = $16,500 x 0.78%

= $128.70

The total annual premium (TAP) is determined by adding together the annual premiums for each crop plan:

tAP = APRV + APlV = $2,128.52 + $128.70 = $2,257.22

Refer to your renewal notice or agricorp.com for base premium rates specific to the crop year.

The minimum annual premium is $100 per FMV-AL plan (i.e. $100 for leafy vegetables and $100 for root vegetables).

Figure

Updating...

References

Updating...

Related subjects :