Manitoba Pork welcomed federal Agriculture Minister Marie-Claude Bibeau’s announcement recently of a $482,000 plus grant to help create a private-sector livestock insurance program to help producers recover economically from a disease outbreak on their farms.
An insurance consulting company that MPC is working with will work with stakeholders and develop a model to determine the risk impacts of diseases. The model will establish the premiums and coverage, adjusted to what the market will pay, with the intent of applying the insurance to the entire Canadian hog sector.
Manitoba Pork’s general manager Andrew Dickson said the private sector is to come up with a model to provide an idea of insured coverages. This could include cleaning, disinfecting the barn, some money to cover animal losses, and some cash flow for a person who runs into this problem, figure out the premium, the coverage, and what insurance vehicle to use to deliver the policy.
Dickson said it would take a lot of actuarial work to provide the project detail required to create an insurance policy underwritten by say, for example, Lloyd’s of London, and the reinsurance market if need be, to cover it off.
This new proposed hog industry program is the same as the current program the poultry industry implemented some years ago for the egg layers, broilers, hatching egg business developed for each province, but ran by a national insurance vehicle. They have two insurance vehicles to deliver insurance products for covering diseases like avian influenza and so on.
“We intend to copy that model, create an insurance model, to use Manitoba as the case sample and then expand the program to the other provinces,” Dickson said. “We’ll make changes as we develop it for Ontario, Quebec, or Alberta conditions, depending on coverage and premiums that would work in those provinces.”
The Council will use the developmental money to recruit an insurance company that develops such products and work closely with them to develop that insurance risk model by providing the needed data. For instance, how much of the losses would it cover and at what premium costs acceptable to producers? The challenge there is nothing in Canada like this for the hog sector and very few, if any, worldwide. It is breaking new ground, and there are many inquiries since the news release went around the world about this project.
“If we successfully develop this program, I’m sure others will replicate it in other parts of the world.”
When Manitoba Pork applied for this funding, they focused on the common diseases like PEDV, PRRS, strictly production diseases that farmers experience on their farms today. With the threat of African Swine Fever, and heaven forbid should it happen, the new program would include the farms infected with ASF. But only in terms of helping them recover the financial hit they would face cleaning and disinfecting, disposing of feed, digging a burial pit, that sort of thing.
Dickens said there is no way the current product will provide for crisis funding for producers where the market value of the animals crashes and having livestock on hand of little or no market value and facing the tragedy to dispose of them humanely.
“Maybe at some point we could make the insurance vehicle available to the government to use the producers signed up on the policy as a vehicle to include some public funds to help those affected by a market collapse,” he said. “But not at this point.” •
—By Harry Siemens
