Beef farmers located on Prince Edward Island (PEI) in Canada will be offered protection against “an unexpected drop in prices over a defined period of time” through a pilot insurance programme which has been rolled out.
According to the Government of Canada, the new Maritime Livestock Price Insurance Pilot Programme will allow producers in PEI and New Brunswick to purchase price protection on beef cattle in the form of an insurance policy, in the event of unexpected market declines.
The move is described as “a new risk management tool for beef producers” which aims to “facilitate growth of the sector across the maritime region”.
According to the Government of Canada, through the new initiative, purchasers pay 100% of the premiums while both federal and provincial governments are making investments to administer the pilot program for producers:
“On PEI, the Maritime Livestock Price Insurance Pilot Program will be administered by the Prince Edward Island Agricultural Insurance Corporation.”
The Maritime Livestock Price Insurance Pilot Program is a two-year regional initiative meant to “complement existing business risk management programs, available to the livestock industry. It will be evaluated and could be extended if it is deemed successful”, according to the Government of Canada.
According to the PEI Government, the premiums are based on the insured index/coverage that the producer selects.
The premium rates are calculated based on the weekly average price of feeder cattle/calves sold through auction in the Ontario and Quebec marketing region voluntarily contributing their data to the location relevant to that settlement Index, expressed in dollars/ Unit and established in accordance with the price setting methodology.
Producers availing of the Maritime Livestock Price Insurance Pilot Program are encouraged to match the policy length to the time period when cattle are expected to be marketed and producers will select the coverage to establish “a floor price that best suits their operation’s needs”.
If the settlement index for the week of the claim date is less than the insured index for that policy, a producer is entitled to a payment under the price insurance policy, according to the PEI Government.
Producers may enter their claim window in the final four weeks of the policy. The first three weeks must be manually managed by producers, and the producer will need to notify the Agri-Commodity Management Association (ACMA) if they want to settle.
At this time if in claim, producers may settle a portion of insured weight or all insured weight. At settlement date, if a claim is owing, the payment will automatically be sent to the producer for all remaining insured weight.
