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Commercial & Pedigreed Creeping Red Fescue Insuring Agreement

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AFSC will indemnify the Insured against damage caused by Designated Perils to Commercial & Pedigreed Creeping Red Fescue grown for seed production pursuant to this Insuring Agreement. This Insuring Agreement incorporates by reference, and is subject to, the Terms and Conditions and Benefits. The definitions in the Terms and Conditions will apply unless the same term is otherwise defined in this Insuring Agreement.

Insurable Crop” means Commercial Creeping Red Fescue or Pedigreed Creeping Red Fescue grown for seed production. The variety of Pedigreed Creeping Red Fescue shall be eligible for certification as Pedigreed Seed in Canada.

Clip Year” means the year the Insured Crop is seeded if seeded without any other crops, or the year after if the Insured Crop is seeded with an annual crop.

Production Year” means a year in which the Insured intends to harvest Creeping Red Fescue Seed.

Rejuvenation” means:

a. harvested field ploughed or disced immediately after harvest; and

b. after the field has been ploughed or disced, the field is leveled and either a cover crop is seeded or the field is left undisturbed with the exception of clipping and spraying for weeds.

Creeping Red Fescue specifications chart

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Creeping Red Fescue can be insured as a common seed, or pedigreed seed on varieties that are eligible for certification as Pedigreed Seed in Canada. Pedigreed Coverage is available for Canadian Seed Growers Association (CSGA) members, and provides a germination guarantee.

a. Individual Coverage: is based on a minimum of five years of records. Crops with fewer than five years of records will be considered to be in the start-up phase.

b. Start-up: Missing yields will be filled in with the historical average yield for the townships in which the farm is located. If the Insured does not have any yield records available, Coverage will be based entirely on the historical average for the township(s) where the farm is located.

c. Average Yield: An Insured’s average yield for a crop type is based on the average of the yield records AFSC has recorded for the crop. Yield records are gathered in different ways, including:

i. Harvested Production Reports (HPR) provided by the Insured;

ii. Yield information gathered by AFSC adjusters who visit the farm, and

iii. Production reviews conducted by AFSC adjusters to confirm the accuracy of HPR information.

d. One-year lag: Actual yields are not available immediately for use as it takes time to gather and verify information. Yields produced and reported in the current year will not be available to calculate Coverage for the following year; it will first be used to set Coverage the second year.
Rules for yield records use:

i. A blend of available yield records and the historical yields for the Risk Area in which the Insured farms when there are four or fewer yield records available.

ii. The average of up to 15 of the most recent yield records for a crop when there are five or more yield records available.

iii. For Coverage that is less than 30 acres the Harvested Production for the specific crop will be excluded from the calculation of the Insured’s Coverage.

For most crops, due to improvements in varieties and management practices, yields generally increase over time. In order to ensure that individual Coverage reflects this trend, individual yield records will be adjusted by a trend factor. Older yield records will be increased more than recent yield records. Adjustments will be made by multiplying individual actual or cushioned yields by a trend factor. The trend factor is a number which reflects the average annual increase in yield for a specific crop in a specific Risk Area.

Cushioning has the effect of stabilizing Coverage by reducing year-to-year fluctuations. Unusually low yield records will be adjusted upward for the purposes of calculating the Final Individual Normal Yield for a crop. When a crop yield is less than 70 percent of the Final Individual Normal Yield, the actual yield will be cushioned and replaced by 70 percent of the Final Individual Normal Yield for that crop for that year. The cushioned yield will be used to set future Coverage whereas the actual yield is used to calculate an Indemnity.

AFSC, in its discretion may limit, restrict, exclude or deny Coverage, in whole or in part, for the following:

a. in the event AFSC determines by the application deadline that an Insured has a high risk of Production Loss;

b. where the land is subject to repeated flooding or where excess moisture is a recurring problem;

c. major changes are made in management practices, acreage, land location, confirmed yields or experience;

d. the Insured makes a change that increases AFSC’s risk without notifying AFSC thereof and AFSC accepting the same risk; or

e. any other practice or action taken by the Insured that would prove detrimental to or limit production of the Insured Crop.

a. Spring Insurance Price: In the spring, AFSC forecasts expected commercial and pedigreed crop prices for the coming crop year.

a. Minimum Premium: There is a minimum $25 of total Premium required per insurance Policy.

b. Rates: Premium rates are set annually based on historical losses and reflect AFSC’s risk of future production losses. Premium rates may vary by crop type, Risk Area, practice and Coverage Level. The Insured’s Premium is calculated by multiplying the dollar coverage by the Insured’s share of the premium rate and applying any applicable premium adjustments.

c. Cost Share: Federal and provincial governments support AgriInsurance programs by paying all administration expenses and sharing premium costs with the Insured.

d. Adjustments & Discounts:

Creeping Red Fescue premium chart

a. Application: New clients must apply for insurance on or before April 30 and AFSC will evaluate eligibility for insurance. Clients are required to demonstrate their legal, financial and operational independence, and can contact AFSC for application documents.

b. Renewal Process: An Insured who elected insurance in the previous year will be automatically renewed based upon the previous year’s information. Personalized renewal notices are available in March. The Insured is responsible to review the information and if changes are required, complete a Change Request form online or return the form to an AFSC insurance representative by mail, fax, email, in person, or request changes by phone, no later than April 30.

c. Coverage Level: Coverage Levels of 50, 60, 70 or 80 percent can be elected.

d. Hail Endorsement: offers spot-loss coverage and may be elected on a crop by crop basis at 60, 70 or 80 percent Coverage Levels by April 30. Hail Endorsement is not available at 50 percent Coverage Level.
Refer to the Hail Endorsement Insuring Agreement for additional information.

e. Auto-Elect Straight Hail Insurance: may be elected on a crop by crop basis by April 30. When elected, a two percent premium discount will be applied on the Statement of Coverage and Premium.

Straight Hail Insurance can be purchased on a field by field basis until July 31.
Refer to the Straight Hail Contract of Insurance for additional information. 
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Creeping Red Fescue is not insurable in the Clip Year.

a. First Production Year

i. The first year of production shall be the year after the Clip Year

b. Second Production Year

i. Fields in their second year of seed production can only be insured if those same fields were insured in their First Production Year

c. Production Year after Rejuvenation

i. After the Rejuvenation year and subject to an acceptance inspection by AFSC, the Insured shall be limited to insuring one crop at full Coverage on that parcel of land.

ii. This year is only insurable if the field was insured in the first and second Production Years.

a. Creeping Red Fescue fields that are direct seeded without a cover crop are seeded and clipped in the same year.

b. Creeping Red Fescue fields that are seeded with a cover crop are seeded in the first year, and clipped in the second year.

c. As per 3.02 a. the first Production Year is the year after the Clip Year.

When an Insured Crop at a specific land location is harvested for two consecutive years, Coverage, as expressed in insured acres, shall be reduced by 70 percent of an amount the previous year’s Adjusted Production exceeds the Final Individual Normal Yield. The maximum reduction applied would not exceed 50 percent of the total acres for that land location.

The reduction formula is:
(Current year’s Final Individual Normal Yield @ 70%) – (previous year’s Adjusted Production – current year’s Final Individual Normal Yield) x 70%.

An acceptance inspection is required in the first year of production and the first year of production after a rejuvenated year to determine eligibility.

The Variable Price Benefit, Reseeding Benefit, Unseeded Acreage Benefit, and Unharvested Acreage Benefit are not available under this Insuring Agreement.

If a reporting deadline date falls on a weekend, the deadline will be extended to the next Business Day.

Creeping Red Fescue reporting deadlines chart

Other important deadlines

Creeping Red Fescue other deadlines chart

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a. All eligible acreage and seeded acreage of Creeping Red Fescue, whether owned, rented or crop shared, must be insured. Insured acres are not insurable under any other crop insurance program, except for applicable Endorsements or where AFSC has consented in writing.

Cash rent and crop share landlords are not eligible for insurance as they are not responsible for the agronomic decisions and do not receive the majority of the proceeds from the sale of the crop.

b. If AFSC determines acres of an Insured Crop and the crop and/or acres differ from those reported by the Insured, the following will apply:

i. When completing acceptance inspections or acreage verification inspections, AFSC will issue a revised Statement of Coverage and Premium based on the crop type and actual number of seeded acres calculated by AFSC and any Indemnity calculation will also be based on the crop type and actual acres.

ii. When completing all other inspections:

1) if the measured or established acreage is within Acreage Tolerance, there is no revision to the Statement of Coverage and Premium and the reported insured acres are used in the calculation of the Indemnity.

2) if the measured acres are outside the Acreage Tolerance compared to acreage shown on the Land Report, AFSC may issue a revised Statement of Coverage and Premium and the Indemnity calculation shall be based on the actual number of Annual Crop seeded acres.

3) AFSC is not obligated to pay an Indemnity on the additional acres if a loss has previously occurred.

4) AFSC may remove the All Crops Insured Discount if additional acres are outside of Acreage Tolerance.

c. AFSC is not required or in any way obligated to revise or adjust its calculation of insured acres for any preceding year.

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a. The Insured is required to file a Land Report for the acres of commercial and pedigreed creeping red fescue by April 30. Fields not reported by April 30 are not eligible for insurance.

b. The Insured must report all Insurable Crops on land that is owned, rented, or crop-shared and include the following information for each field:

i. legal land description for the location of each Insured Crop including the Part;

ii. number of seeded acres of each Insured Crop, or the number of acres of Summerfallow;

iii. crop and variety seeded;

iv. insured end use (e.g. Commercial or Pedigreed)

v. whether the acres are seeded on dryland or irrigated land;

vi. seeding date, whether or not the fields are in a Production Year; and

vii. summary of insured acres, and whether or not there is any Carryover Inventory.

AFSC requires both insured and uninsured land information. Coverage is based on the land base farmed, not just the land insured, therefore the information is required to ensure Coverage and discounts are correct.

c. AFSC reserves the right to reject requests for changes to the Land Report after the April 30 filing deadline.

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a. Information provided by the Insured is used to generate a Statement of Coverage and Premium, which explains Coverage and Premium and states AFSC’s Coverage limit.

b. The Insured should review their Statement of Coverage and Premium carefully to ensure it is complete and accurate. Errors and omissions must be reported to AFSC within 15 calendar days of receipt.

c. AFSC reserves the right to deny additional Coverage when information contained on the Statement of Coverage and Premium reflects what is reported on the Land Report.

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The Insured is required to submit a Notice of Loss to initiate a claim. The required timeframes for the Notice of Loss and the deadline to initiate a claim are as follows:

a. Harvested Production Report (HPR): on a form acceptable to AFSC once harvest is complete and not later than September 15.

b. Post harvest claim: via the HPR, losses must be reported before December 31 in the calendar year in which the loss is claimed to have occurred.

If the Insured is late in filing a Notice of Loss AFSC may reject the claim.

a. Upon receipt of a claim for loss:

i. where AFSC processes a claim, AFSC will serve the Insured with a Statement of Loss.

ii. where AFSC’s process is to conduct an inspection, following the inspection, AFSC will serve the Insured with a copy of the Inspection Report.

b. If the Inspection Report results in no payment, or if as a result of the Inspection Report the claim for loss is withdrawn by the Insured, the Inspection Report will be considered to be the final Statement of Loss for the claim by the Insured and no further Statement of Loss will be issued by AFSC.

c. If the Insured does not, within seven days of service of the Inspection Report, advise AFSC of the Insured’s disagreement with the report or does not request a re-inspection, AFSC will issue the Statement of Loss according to the Inspection Report.

d. When AFSC has conducted an inspection and issued an Inspection Report and a Statement of Loss, and the Insured has a dispute relating to the Statement of Loss and requests a re-inspection, AFSC will only review the Statement of Loss if the Insured notifies AFSC of the request for a re-inspection within seven days from the day that the Insured is served with the Inspection Report.

a. After an inspection, pursuant to Section 8.02 c, if the Insured, within seven days of service of the Inspection Report:

i. advises AFSC of the Insured’s disagreement with the report; and

ii. requests a re-inspection:

AFSC will conduct a re-inspection, and no Statement of Loss will be issued until after the re-inspection has been conducted. AFSC reserves the right to charge a fee for Insured requested re-inspection of crops.

a. Acreage of Insured Crop(s) Put to Another Use must first be released by AFSC.

b. The Insured is required to contact AFSC five days in advance of putting an Insured Crop to a use other than combining to request an appraisal and release of acres. AFSC will need to know:

i. The number of acres intended to be put to an alternate use;

ii. The reason for the alternate use;

iii. An estimate of the yield.

c. Depending on the estimate of yield, the acres may be released from the Branch, or an adjuster may complete a field inspection to determine the yield appraisal before acres are released.

d. AFSC may defer the appraisal on a damaged Insured Crop which the Insured intends to Put to Another Use.

e. When the Insured has accepted the Appraised Potential Production on any portion of an Insured Crop, no further appraisal will be made on that portion unless, and at the sole discretion of AFSC, substantial damage occurs before the Insured can put the crop to some other use within a reasonable period of time. Such Inspection may be subject to a re-inspection administrative fee.

f. Where an Insured Crop is Put to Another Use without first being assessed and/or released by AFSC, AFSC will deem the Appraised Potential Production to be zero, and the Uninsured Causes of Loss to be equal to Coverage on acres Put to Another Use.

g. The Insured must not dispose of an Insured Crop or put it to a use other than combining without AFSC releasing acres, as it may negatively impact their insurance. Once authorized by AFSC, the Insured may leave Inspection Strips or Exclosures if putting acres to another use.

h. Where Inspection Strips or Exclosures are authorized by AFSC for all inspection types, the Insured is required to leave Inspection Strips or set up appropriate Exclosures, or AFSC will deem the Appraised Potential Production to be zero, and the Uninsured Causes of Loss to be equal to Coverage on the acres Put to Another Use.

a. Inspection Strips are representative standing strips or swaths of the Insured Crop in such measurements as required by AFSC to determine the crop’s production potential.
Inspection Strips are to be left in from the edges of the field, a distance of about one-third of the width of the field, for the length of the field and a minimum of ten feet in width, for inspection by AFSC.

i. On fields less than 100 acres, two strips are required.

ii. On fields of 100 acres or more, an additional strip must be left in the middle of the field.

iii. On fields of 100 acres or more that span multiple quarter sections, treat each quarter section as a separate field; for fields less than 100 acres, two strips are required; for fields greater than 100 acres, three strips are required.

b. Exclosures are representative sites of the crop that are fenced off and are used when the crop is being pastured as the Insured is unable to leave representative Inspection Strips.

i. A minimum of two sites for fields up to 40 acres,
ii. A minimum of one site for every additional 40 acres in that item, is required.

Information on Inspection Strips is available on afsc.ca. Contact AFSC directly for information regarding Exclosures.

The procedures set out in AFSC’s adjusting procedure manuals shall be used in the assessment of production and insurable loss of an Insured Crop.

AFSC recommends that the Insured or Authorized Representative accompany adjusters during on-farm inspections.

When Uninsured Causes of Loss are determined, claims may be reduced or denied, reflecting the amount of production due to the uninsured causes. The acres remain insured and full Premium remains payable. Common examples where Uninsured Causes of Loss may be applied include, but are not limited to:

a. unapproved, untimely or improperly applied products or methods for the:

i. control of weeds,

ii. control of insects,

iii. control of plant diseases,

iv. enhancement of plant development;

b. inadequate machinery, labour or failure to complete repairs to equipment on a timely basis;

c. machinery and equipment failure due to mechanical defects or improper operations;

d. damage to an Insured Crop from fertilizers, herbicides, pesticides, fungicides, soil or crop additives or any other product where the damage was caused by drift, residue, improper direct application or improper use of product;

e. untimely harvest practices for the area and the crop;

f. improper harvest management;

g. damage by domestic animals or poultry;

h. neglect or theft of the Insured Crop;

i. negligent or wrongful acts of a third party (e.g. spray drift or stray animals);

j. damage after an inspection by AFSC or while in storage, including heating;

k. grade reduction before an inspection by AFSC if stored production is not weather protected; or

l. any Designated Peril deemed avoidable by AFSC.

If AFSC pays no Indemnity because of an Uninsured Cause of Loss, AFSC will not refund any portion of the Premium and the Insured is not relieved from paying any outstanding Premium.

a. Service of the Inspection Report or a Statement of Loss may be effected on the Insured by:

i. personal service;

ii. ordinary mail or registered mail, in which case service is deemed to have been effected;

1) seven days from the date of mailing if the document is mailed in Alberta to an address in Alberta, or

2) 14 days from the date of mailing if the document is mailed to an address located outside of Alberta; or

iii. by facsimile, email or other electronic means in accordance with AFSC’s most recent records for the Insured.

b. Where there is more than one Insured in respect of the crop loss for which an inspection has been made, service of the Inspection Report or Statement of Loss on one of the Insured is deemed to be service on all the Insureds.

To facilitate tax planning, Insureds can choose in advance to defer Indemnities to the following tax year. There will be no recourse to defer payment once a payment has been issued. Deferred Indemnities will not be applied to outstanding Premiums/balances until the deferred date and interest will continue to accrue.

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a. Carryover grain, including purchased inventory and uninsured crop production, stored on or off the farm must be declared to AFSC on the Report of Grain in Storage Prior to Harvest form prior to commencing harvest and not later than August 15, even though the intent may be to sell or feed it before harvest.

b. The Insured may be required to provide sales receipts to identify carryover, purchased inventory and uninsured production. It is important to report Carryover Inventory as it may affect eligibility for an advance or claim if in a loss situation.

c. AFSC may count Carryover Inventory and uninsured production as part of the Harvested Production if the Insured fails to report, store separately and/or identify previous year’s production, or grain purchases.

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a. An HPR must be submitted online or to a branch office when harvest is complete, and no later than
September 15.

b. A late filing fee will be applied for HPRs submitted after the September 15 deadline.

c. The Insured is required to provide:

i. Changes to Carryover Inventory from what was reported on the Report of Grain in Storage Prior to Harvest form;

ii. Uninsured production;

iii. Field Documentation information including preharvest or abandoned acres:

1) Abandoned acres require a reason, land location, number of acres and yield estimate

iv. Insured production by field;

v. Gross stored and fed production including bushel weight, dockage and grade;
vi. Net delivered or sold production and grade;

vii. Date harvest was completed;

viii. Volunteer Production.

For information on measuring stored production, refer to Determining Production in Storage on afsc.ca

d. First and second year production, and commercial and pedigreed seed production, must all be stored separately.

e. Unlicensed and deregistered varieties must be stored separately.

f. Notification of an insurance claim and any required loss adjustment procedures are based on the information provided by the Insured on the HPR.

g. If the Harvested Production report is not submitted by the Insured before December 31, the yield will be recorded as zero and no Indemnity will be calculated.

a. When Harvested Production fails germination standards for the pedigreed creeping red fescue, the Insured may be eligible for a claim.

b. Where, after the Harvested Production Report is filed, Harvested Production of an Insured Crop is less than total Coverage after consideration of grade, weight, dockage, and moisture content, AFSC will determine Adjusted Production.

c. The Adjusted Production of delivered or sold production of an Insured Crop will be assessed based on the cash purchase tickets or the agreed upon grade, weight and moisture content that the final cash purchase tickets will be issued on.

d. If the Harvested Production contains Volunteer Production of other grains or seeds that exceeds six percent by weight of the sample and is separable, the other grains and seeds shall be calculated by AFSC to the equivalent value of the Insured Crop and shall be included as part of the Adjusted Production.

a. If, based on the production reported on the HPR, commercial creeping red fescue is in a Production Loss and meets a set of criteria determined by AFSC, the Insured may be eligible to be paid for the loss. AFSC will calculate the potential payment, contact the Insured to verify the information reported on the HPR, and when eligible, process the Indemnity without an on-farm inspection.

b. Crop insured with the end use of pedigreed is not eligible for a Payment by Declaration.

If, based on the production reported on the HPR, an Insured Crop is in a Production Loss, the Insured may have the option of accepting an advance payment prior to AFSC completing an on-farm inspection.

a. Post Harvest Advance: The Insured can receive a 50 percent advance payment on the estimated Production Loss prior to grade loss. Once the post harvest claim is finalized, the Insured will receive the remaining Indemnity including any grade loss.

b. Preliminary Payment: if eligible, the Insured can receive a preliminary payment.

i. A Preliminary Payment takes the Insured’s reported production without grade loss and adds 20 percent to it to mitigate the risk of overpayments.

ii. AFSC then calculates the difference between that estimated production and Coverage, and pays the preliminary payment based on the estimated Production Loss.

iii. Once the post harvest claim is finalized, AFSC recalculates the Production Loss based on the Harvested Production determined during the on-farm inspection, and the Insured will receive the remaining Indemnity including any grade loss.

If there is an overpayment due to differences between the Insured’s information reported on the HPR, and the Harvested Production determined during the post harvest inspection, repayment will be required within 30 days of notification. The advance Indemnity must exceed a minimum amount, can be deferred, and will be applied to amounts owing to AFSC and assignments.

a. Post harvest claims are triggered based on the information provided by the Insured on the HPR.

b. An AFSC adjuster is assigned to the claim and will make an appointment for an on-farm inspection. The adjuster will:

i. Verify and/or measure the number of acres insured;

ii. Identify acres harvested; and

iii. Determine the quantity and quality of the crop harvested by sampling storage facilities and reviewing production sales receipts.

To ensure program integrity, AFSC retains the right to complete production reviews. Some production reviews are selected on the basis of an identified risk, while others are randomly selected.

a. AFSC may combine production or calculate production from the Insured’s crop in a manner determined by AFSC including but not limited to combining, combining and pro-rating, and pro-rating of production.

b. In the event that the Harvested Production is stored in such a manner that it is not possible to obtain an accurate production count (e.g. stored with uninsured production) AFSC may assign Uninsured Causes of Loss up to Coverage or prorate production.

c. AFSC may prorate or combine the production if the Insured fails to retain:

i. insured production separate from uninsured production;

ii. insured production separate from production of another producer;

iii. Harvested Production separate from Carryover Inventory;

iv. irrigated production separate from dryland production; or

v. stored production separately for each Policy where there are two or more of the same Policy type for one business.

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a. An Indemnity shall be calculated for the period commencing with the time the Insurable Crop is seeded and shall end at the earlier of:

i. the time the Insured Crop or any part of it is put to a use other than that for which it was originally intended;

ii. the time the Insured Crop is harvested; or

iii. September 15 of the year in which the Insured Crop would normally have been harvested unless such times are extended by AFSC, in its discretion.

b. If the Insured has production from a crop harvested after September 15, that production is to be reported and is included in the Insured’s Harvested Production for the year in which the crop would normally be harvested.

a. Stage 1 prior to May 1

i. No Indemnity is payable for loss in any year prior to May 1.

b. Stage 2 May 1 to September 15

i. If the Insured notifies AFSC of a loss from Designated Perils on or after May 1 and before September 15 in each year, an Indemnity shall be calculated as follows:

1) [{(Individual Coverage Normal Yield x Coverage Level x Number of Insured Acres) – Adjusted Production} x Insurance Price] – Wildlife Damage Compensation Program payments.

ii. Before AFSC pays post-harvest Indemnity the Insured must file a Harvested Production Report.

iii. In no case, for an Insurable Crop, shall the combined Indemnities under any Insuring Agreement, including the Hail Endorsement Insuring Agreement, Wildlife Damage Compensation exceed total Dollar Coverage for that crop under this Contract.

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