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Working in agriculture requires the ability to withstand unpredictable events. To protect producers from designated perils that lead to production loss, Agriculture Financial Services Corporation (AFSC) provides a suite of perennial insurance programs.

These programs provide:

  • a production guarantee for hay crops based on average historical yields and the coverage option selected; or
  • coverage for pasture based on conditions in the area, determined by an indicator of production loss, such as precipitation or satellite imagery. This coverage is not directly related to losses to insured fields.
The deadline to apply, make changes to or cancel Perennial Crop Insurance has been extended to Friday, March 4

What’s new for 2022

Moisture Deficiency program

Changes have been made to Moisture Deficiency Insurance for pasture and Moisture Deficiency Endorsement for hay. Feedback from producers resulted in a change to the minimum amount of moisture used in calculating the daily moisture amounts; the new minimum is 1.0 mm up from 0.1 mm. In addition, a new heat component has been included whereby for every day that the temperature at the selected weather stations(s) reaches 30 C or higher, 1.0 mm will be subtracted from the precipitation total for the month; and if the temperature reaches or exceeds 35 C, 2.0 mm more will be deducted.

Weather Stations

One new weather station, Wardlow, is being added to the network of weather stations available across Alberta, while Violet Grove weather station is being decommissioned, and two weather stations, Dapp and Bow Island North, are being replaced with Pibroch and Winnifred respectively.

  • Clients who had selected Violet Grove, Dapp or Bow Island North in the previous year can update their selected weather stations by completing a change request prior to the last day of February.
  • As weather stations are subject to change, please view the Weather Station Map or visit your AFSC branch office for a current list of weather stations.

Alberta Premium Reduction discontinued due to extreme weather events of 2021

Last year, based on a healthy insurance crop fund reserve, AFSC was able to provide clients with a 20 per cent premium reduction on the majority of insurance premiums. The plan was to reevaluate the premium reduction annually and adjust based on the events of the previous year. Due to the major weather events of 2021, claim payouts are predicted to be the highest in AFSC’s history. This will result in a significant decrease in the fund reserve, making the Alberta Premium Reduction unsustainable and the discontinuation of the initiative for 2022 and subsequent years.

What was new in 2021

AFSC updated the pasture mask for Satellite Yield Insurance (SAT) to reflect the current land use and ensure land is identified as pasture.

Weather Stations: There were four new weather stations added to the network of weather stations across Alberta; and two weather stations, Peace River and Hillsdown, were replaced.

Hay Insuring Agreement

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AFSC will indemnify the Insured against damage caused by Designated Perils to Hay 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.

Accelerated” means the additional Indemnity calculated when an
Insured produces less than 30 percent of their Expected Normal Yield.

Designated Perils” In addition to the Designated Perils in the Terms
and Conditions, Article 1: Definitions, Hay will also be covered for
Winterkill Provision.

Hay” means seeded perennial tame grass, Legumes or grass-legume
mix crops grown for mechanical harvesting for use as livestock feed on
dryland acres, and if grown for harvesting on irrigated land, it means
those same crops but only if they contain more than 50 percent alfalfa.

Haying Being General in the Area” means the date set by AFSC
when provincially the majority of haying has started for the current year.

Insurable Crop” means Hay that will be mechanically harvested for
use as livestock feed.

Legumes” means alfalfa, red clover aliske clover, sainfoin, sweetclover
and milkvetch.

Uninsured Production” means an Insurable Crop harvested from
roadsides, rejected fields, uninsured acreages or land acquired after the
insurance deadline.

Hay insurance insurable crops chart

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Coverage is a fundamental part of any insurance Policy and is based upon a long-term average yield.

a. Indexing: is based on a minimum of four years of records. Crops with fewer than four 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 Risk Area 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 Risk Area(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 (HPRs) 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 10 of the most recent yield records for a crop when there are four or more yield records available. Yield records older than 1991 are not used.

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.

Cushioning has the effect of stabilizing Coverage by reducing year-to-year fluctuations. Unusually low yield records will be adjusted upward for the purpose of calculating the Expected Normal Yield for a crop. When a crop yield is less than 70 percent of the Expected Normal Yield, the actual yield will be cushioned and replaced by 70 percent of the Expected 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.

a. An Insurable Crop comprised of more than 50 percent alfalfa grown on irrigated land is eligible for separate Coverage if:

i. the crop is grown on fields declared as irrigated;

ii. there is an adequate source of water;

iii. the Insured has reliable irrigation equipment;

iv. adequate irrigation water is applied on a timely basis; and

v. the Insured maintains an up-to-date log showing the dates and approximate amounts of rainfall and irrigation water applied to each Insured Crop.

b. AFSC may reclassify the alfalfa as grown on dryland, or apply Uninsured Causes of Loss if:

i. the Insured fails to fulfill all or part of the conditions in subsection a above; or

ii. drought is considered by AFSC to be a contributing cause of loss.

c. Irrigated acres are insured separately from dryland acres of the same crop:

i. acres must be identified as irrigated or dryland; and

ii. production from irrigated and dryland acres must be stored and reported separately.

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 or limit production to the Insured Crop.

a. Spring Insurance Price: this Insuring Agreement has the option of two Spring Insurance Prices, a low and a high price, based on forecasted market prices and transportation costs for the year.

b. Fall Market Price: is based on Alberta Agriculture, Forestry and Rural Economic Development’s hay price from the Farm Input Survey for the month of October.

c. Variable Price Benefit: is offered to protect against price fluctuations between the Spring Insurance Price and the fall price. See Benefits document for information.

The Variable Price Benefit applied to most crops and is triggered when the Fall Market Price increases by a minimum of 10% to a maximum of 50% above than the Spring Insurance Price. Clients are compensated on a crop by crop basis when they have a production shortfall below their production guarantee.

a. 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.

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

c. Adjustments & Discounts:

Hay adjustments and discounts chart

a. New clients must apply for insurance on or before the last day of February 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 purchased Hay Insurance in the previous year will be automatically renewed based upon the previous year’s information. Personalized renewal notices are available in January. 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 by the last day of February.

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

i. Different Coverage Levels may be selected for dryland and irrigated Hay.

d. Price Options: An Insured has the option of electing a high price or a low price option.

i. The same insurance price option must be selected for dryland and irrigated Hay.

e. Crop Information: Land Locations and Insurable Crop types by field, the date the field was seeded and the number of acres in the field.

f. Moisture Deficiency Endorsement: see Moisture Deficiency Endorsement Insuring Agreement for required information.

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Insurable Crops that will be mechanically harvested for use as livestock feed are eligible for Hay Insurance. This includes perennial tame grasses, Legumes and grass-legume mixes which are insurable under the following crop types:

a. Dryland – Alfalfa (>50 percent alfalfa) intended for two cuts, in Designated Areas only;

b. Legume (>50 percent), including alfalfa, red clover, alsike clover, sainfoin, sweet clover and milkvetch, intended for one cut;

c. Grass (<=50 percent Legume), including brome grass, wild rye grass, wheat grass, fescue, timothy, orchard grass, rye grass, etc.;

d. Irrigated – Alfalfa (>50 percent alfalfa) intended for multi-cuts, insurable in all forage Risk Areas.

This Insuring Agreement does not provide Coverage for the following:

a. Hay in the year it is seeded;

b. Hay pastured consecutively in the previous two years;

c. native hay;

d. pasture;

e. Hay grown on land subject to repeated flooding or where excess moisture is a recurring problem; or

f. straw from either grass or Legumes grown for seed.

This Insuring Agreement has coverage for Winterkill Provision when the following conditions are met:

a. The acres are insured in the current year; and

b. The acres were insured in the previous year; and

c. Acres have not had more than five years of production for alfalfa and Legume; or

d. Acres have not had more than eight years of production for grass.

a. The Insurable Crop may be subject to an acceptance inspection and AFSC may, at its discretion, change Coverage or reject insurance.

b. If alfalfa acres are rejected, these acres can be insured as Legume or grass; or

c. If the acres will be pastured, they can be insured under pasture insurance when the Insured has an active Moisture Deficiency Insurance or Satellite Yield Insurance as improved pasture. Rejected acres can be transferred to the active pasture insurance program and the Election revised as needed.

Reasons acceptance inspections are completed for Hay include:

– Hay fields in the first year of production,
– Newly insured fields,
– Hay stands that are older than the age criteria established for the crop type as calculated from the first year of production,
– Hay fields that were grazed past April 30,
– Hay fields that have not been hayed for two years,
– Other risk criteria as determined by AFSC.

Quality Loss is 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.

Hay reporting deadlines chart

Other important deadlines

Hay other deadlines chart

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a. All acreage managed as Hay (dryland and irrigated), whether owned, rented or leased, must be insured and there is a minimum of 20 acres for this Insuring Agreement. Insured acres are not insurable under any other crop insurance program, except for applicable Endorsement, or when AFSC has consented in writing.

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:

a. When completing acceptance inspections or acreage verification, 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.

b. When completing all other inspections:

i. 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.

ii. if the measured acres are outside the Acreage Tolerance compared to acreage reported, 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.

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

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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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.

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

AFSC reserves the right to deny additional Coverage when information contained on the Statement of Coverage and Premium reflects what is reported by the last day of February.

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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 October 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.

After an inspection, pursuant to subsection 7.02c, if the Insured, within seven days of service of the Inspection Report:

a. advises AFSC of the Insured’s disagreement with the report, and

b. 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 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 baling dry, measurable bales 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. If an Insured Crop is eligible for the Winterkill Provision and is Put to Another Use due to winterkill:

i. the Appraised Potential Production will be an amount no less than one-half of Coverage on the acres Put to Another Use provided the acreage was first assessed by AFSC.

ii. Alternatively, Premiums may be refunded and these acres become eligible for annual crop insurance, subject to the Terms and Conditions and the Insuring Agreement for the annual Insurable Crop.

h. If an Insured Crop is intended to be ploughed under or sprayed out prior to Haying Being General in the Area, the Insured must provide AFSC with prior notification to obtain release.

i. If the released Hay acres are subsequently seeded to an elected annual crop, these acres can be transferred to an annual crop Policy, subject to the Terms and Conditions, and the Insuring Agreement for the annual Insurable Crop.

ii. If the released acres are not seeded to an elected annual crop, the acres will remain insured under the Hay Policy; AFSC will deem the Appraised Potential Production to be zero, and the uninsured loss to be equal to Coverage.

i. If a one-cut Insured Crop is Put to Another Use on or after Haying Being General in the Area and with prior authorization from AFSC, Coverage and Premium on this acreage will remain in effect and AFSC will apply the Appraised Potential Production.

j. If a two-cut Insured Crop (alfalfa) is ploughed under, sprayed out, or pastured after first cut Haying Being General in the Area but prior to second cut Haying Being General in the Area and with prior authorization from AFSC, Coverage and Premium will be reverted to one-cut Hay (Legume).

k. Insured must not dispose of an Insured Crop or put it to a use other than baling in dry, measurable bales, without AFSC releasing acres, as it may negatively impact their insurance. Once authorized by AFSC, the Insured may leave Exclosures or standing Inspection Strips if putting acres to another use.

l. Where standing Inspection Strips or Exclosures are authorized by AFSC for all inspection types, the Insured is required to leave standing 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.

Inspection Strips are representative standing strips 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.

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

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

c. 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.

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.

a. A minimum of two sites for fields up to 40 acres,

b. A minimum of one site for every additional 40 acres in that item, is required.

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.

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

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

c. 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;

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

e. improper harvest management;

f. damage by domestic animals or poultry;

g. neglect or theft of the insured crop;

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

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

j. damage resulted from winter grazing;

k. 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 Hay, including purchased inventory and uninsured crop production, stored on or off the farm must be declared to AFSC via the Report of Hay in Storage Prior to Harvest form prior to commencing harvest and not later than July 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.

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 hay 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 October 15.

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

c. The Insured is required to provide:

i. On the HPR;

1) Carryover Inventory – changes in Carryover Inventory from what was reported on the Report of Timothy Hay in Storage Prior to Harvest form;

2) Field Documentation information including preharvest, pastured, plowed down, or abandoned acres;

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

4) Uninsured production;

5) Insured production by field and cut;

6) Bale weight and percent of moisture;

7) Date harvest of each cut was completed;

8) Number and type of bales stored, fed, or sold.

d. Harvested Production from all insured crop types are rolled together and moisture is standardized to 15 percent by weight.

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

f. When there is a production shortfall, the Insured is required to contact AFSC prior to feeding any insured Hay.

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.

h. The Insured may request corrections or revisions to the existing Harvested Production Report record for a Crop Year, up to March 1 of the following year by providing supporting documentation that is satisfactory to AFSC.

a. Where, after the Harvested Production Report is filed, total production of an Insured Crop is less than total Coverage after consideration of percent of moisture, AFSC will determine Adjusted Production.

b. 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 weight and moisture content that the final cash purchase tickets will be issued on.

c. When irrigated acres are in a production shortfall, the Insured will be asked to provide an irrigation log showing dates of precipitation and approximate amounts of water applied.

If based on the production reported on the HPR, the Insured Crop is in a production shortfall 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.

a. If based on the production reported on the HPR the Insured has the option of accepting an advance payment prior to AFSC completing an on-farm inspection.

b. The advance is a minimum 50% of the estimated shortfall and will be the higher of the following;

i. 50% advance, if the Insureds production is above 30% of their Coverage.

ii. 75% advance, if the Insureds production is less than 30% of their Coverage.

c. The Accelerated Indemnity allowance for lower production is not available on the advance and will be applied to the final post harvest assessment.

d. If there is an overpayment due to differences between the Insured’s information reported on the HPR, and the production determined during the post harvest inspection, repayment will be required within 30 days of notification. Advance Indemnity must exceed a minimum amount and will be applied to amounts owing to AFSC and assignments. Advances on Hay Insurance cannot be deferred.

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 a field inspection. The adjuster will:

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

ii. Identify acres harvested; and

iii. Determine the quantity of the crop harvested and review 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 generated.

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 AFSC may assign Uninsured Causes of Loss up to Coverage or prorate production.

c. AFSC may pro-rate 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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The Insurable Period begins at the start of the Crop Year and shall end at the earlier of:

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

b. the date the Insurable Crop is harvested; or

c. October 15 of the year in which the Insurable Crop would normally have been harvested.

a. Prior to first-cut Haying Being General in the Area, as determined by AFSC, an Indemnity will be calculated as follows:

i. if selected by the Insured, a Premium refund on damaged acres; or

ii. an Indemnity not to exceed 50 percent of the Dollar Coverage by crop; or

iii. Appraised Potential Production shall not be less than 50 percent of Coverage by crop.

b. If only a portion of the total acreage of an Insured Crop is released because of damage, the appraisal will be added to the Adjusted Production from the remaining acreage of the Insured Crop.

c. Once all the Harvested Production and Appraised Potential Production for the Insured is reported for the year:

i. If the Insured incurs a loss from Designated Perils on or before October 15 in each year, the Indemnity for the Hay will be calculated based on full Coverage as follows:

1) If the Adjusted Production is less than Coverage but equal to or greater than 30 percent of the Expected Normal Yield for all Insured Acres (Expected Normal Yield x Insured Acres), Indemnities will be an amount equal to:
[(Coverage – Adjusted Production) x Insurance Price] – Wildlife Damage Compensation Program payments.

2) If the Adjusted Production is less than 30 percent but greater than 20 percent of the Expected Normal Yield for all Insured Acres, Indemnities will be Accelerated by compensating for twice the loss between 20 and 30 percent, and shall be an amount equal to:
[{Coverage – (Adjusted Production – {((Expected Normal Yield x Insured Acres x 30%) – Adjusted Production) x 2))} x Insurance Price] – Wildlife Damage Compensation Program payments.

3) If the Adjusted Production is less than or equal to 20 percent of the Expected Normal Yield for all Insured Acres (Expected Normal Yield x Insured Acres), Indemnities will be an amount equal to, but not exceeding;
[Coverage x Insurance Price] – Wildlife Damage Compensation Program payments.

ii. AFSC may apply, in its discretion, the Appraised Potential Production if the Insured has not completed harvest on or before October 15.

Moisture Deficiency Endorsement Insuring Agreement

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AFSC will indemnify the Insured when the Percent of Normal Moisture is less than the Threshold Moisture at the Selected Weather Station(s) for the Insured’s dryland Hay 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.

The Moisture Deficiency Endorsement can be purchased along with dryland Hay Insurance. This endorsement provides additional coverage based on the current year’s precipitation over a specified period at the Selected weather Station(s) compared to the long-term normal. Conditions at the weather stations may not reflect conditions on the insured fields.

August Moisture” is the amount of precipitation, as determined by AFSC, for the month of August, for Selected Weather Station(s).

Designated Peril” means lack of moisture at the Selected Weather Station(s). For greater clarity, this is the only Designated Peril under this Insuring Agreement, and the Designated Perils listed under Article 1 of the Terms and Conditions do not apply to this Insuring Agreement.

Dollar Coverage” means the dollar amount of this additional Coverage and is based on 15 percent of 80 percent of the Risk Area Normal Yield for the type of Hay being insured and the highest Spring Insurance Price.

Hay” means seeded perennial tame grass, Legumes or grass-Legume mix crops grown for mechanical harvesting for use as livestock feed.

Insurable Crop” means Hay grown on non-irrigated land.

July Moisture” is the amount of precipitation, as determined by AFSC, for the month of July, for a Selected Weather Station(s).

June Moisture” is the amount of precipitation, as determined by AFSC, for the month of June, for a Selected Weather Station(s).

May Moisture” is the amount of precipitation, as determined by AFSC, for the month of May, for a Selected Weather Station(s).

Normal Moisture” means the long-term average precipitation, as determined by AFSC, for a Selected Weather Station(s).

Normal Precipitation” for each Period of Moisture is the long-term average amount of moisture, as determined by AFSC, for a Selected Weather Station(s).

Payment Rate” means the rate of compensation at which the Insured is indemnified, as determined by AFSC.

Percent of Normal Moisture” means, for the Selected Weather Station(s) for the current year, the sum of the May Moisture, June Moisture, July Moisture and August Moisture expressed as a percent of their respective Normal Moisture, with each Period of Moisture weighted by the Weighting Option elected by the Insured.

Period of Moisture” is the period for which moisture is measured for this insurance program. There are four different periods: May, June, July and August.

Selected Weather Station” means eligible weather station(s) elected, to a maximum of three, by the Insured and approved by AFSC.

Threshold Moisture” is the Percent of Normal Moisture for a Selected Weather Station(s) below which insurance payments begin.

Weighting Option” is the option elected by the Insured to apply specified percentages to the Percent of Normal Moisture for each Period of Moisture.

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a. Each Risk Area has an Area Normal Yield for each pasture type based on recommended cattle-carrying capacity. The Dollar Coverage offered through this Insuring Agreement will be determined by AFSC for each Risk Area and eligible Hay type.

b. Eighty percent of the Area Normal Yield is used as the base yield, setting Coverage for each Insured in the Risk Area.

AFSC will use precipitation data provided by the Alberta Government ministry responsible for Agriculture. If AFSC is not able to complete the assessment due to insufficient data being provided, this Contract will cease to be enforceable against AFSC and cease to have any effect against AFSC. AFSC will then return to the Insured all paid Premiums.

a. Spring Insurance Price: AFSC offers one price for each Insurable Crop type insured under Hay Insurance for this Endorsement.

a. Adjustments & Discounts:

MDE adjustments and discounts chart

a. New clients must select this Endorsement along with Hay Insurance on or before the last day of February.

b. Renewal Process: An Insured who purchased Moisture Deficiency Endorsement in the previous year will be automatically renewed based upon the previous year’s information.

c. Length of Season: The Insured chooses between a short season option, which includes May, June and July precipitation, or a long season option of May, June, July and August precipitation, that best represents pasture growth and supports their management strategies.

MDE season length chart

d. Weighting Option: the Insured has the choice of different Weighting Options within the growing season. Based on the weighting percentages, there are four season options available to select.

MDE season options chart

Weighting the precipitation in each month allows you to select the Weighting Option that best reflects your area, crop type and management practices.

a. A network of weather stations is established across the province. Rainfall for the current year is compared to historical rainfall (normal) for the same growing period at the Selected Weather Station(s) to determine a claim.

b. The Insured can choose up to three weather stations from the network of eligible weather stations that best represent the conditions on their farm and within proximity of their land base. The Insured is not allowed to skip a weather station, and Selected Weather Station(s) are subject to approval by AFSC.

c. Precipitation used to calculate a claim payment for the current year is limited by the following rules:

i. Daily recorded precipitation at a Selected Weather Station(s) is capped at an amount equal to the Normal Precipitation for the month;

ii. Monthly recorded precipitation at a Selected Weather Station(s) is capped at an amount equal to one and a half times the Normal Precipitation for that month; and,

iii. Daily precipitation measurements under 1.0 mm will be considered 0.0 mm, and will not be included in determining the precipitation for the month.

iv. This Insuring Agreement includes an extreme temperature trigger that will deduct from the monthly recorded precipitation of the Selected Weather Station(s):

1) 1.0 mm for each day the temperature is 30 Celsius or higher

2) an additional 2.0 mm (3.0 mm total) for each day the temperature is
35 Celsius or higher

d. Precipitation is recorded at the Selected Weather Station(s). Precipitation in millimeters (mm) at the weather station for the current year is compared to the Normal Precipitation in mm recorded for the same weather station(s). Both the actual and normal amounts are weighted by the option selected at the same weather station(s). This comparison describes a ‘percentage of normal’, which, if less than the allowable Threshold Moisture percent of normal, initiates a claim payment.

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Insurable Crops that will be mechanically harvested for use as livestock feed are eligible for Hay Insurance. This includes perennial tame grasses, Legumes and grass-legume mixes which are insurable under the following crop types:

a. Dryland – Alfalfa (>50 percent alfalfa) intended for two cuts, in Designated Areas only;

b. Legume (>50 percent), including alfalfa, red clover, alsike clover, sainfoin, sweet clover and milkvetch, intended for one cut;

c. Grass (<=50 percent Legume), including brome grass, wild rye grass, wheat grass, fescue, timothy, orchard grass, rye grass, etc.;

d. Irrigated – Alfalfa (>50 percent alfalfa) intended for multi-cuts, insurable in all forage Risk Areas.

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

MDE reporting deadlines chart

 

 

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a. Moisture Deficiency Endorsement is only available under Hay Insurance.

b. Once selected, all acres of dryland Hay including alfalfa, Legume and grass that are insured under the Hay Insurance are insured under this Insuring Agreement.

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The Insured is not required to submit a Notice of Loss to initiate a claim. Payments under this Insuring Agreement are based on a comparison between annual measured precipitation at the Selected Weather Station(s) relative to the long-term average precipitation for the same station(s), described as a Percent of Normal. If the Percent of Normal is less than the allowable Threshold Moisture, an indemnity is automatically paid.

a. Upon calculation of a claim for loss, AFSC will serve the Insured with a Statement of Loss.

b. If the calculation of a claim for loss results in no payment, the Statement of Loss will be considered to be the final Statement of Loss for the claim by the Insured. No further Statement of Loss will be issued by AFSC.

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Losses are paid when accumulated precipitation at the Selected Weather Station(s) falls below the Normal Precipitation for the Selected Weather Station(s) according to the payment schedule.

a. An Indemnity for each Insurable Crop shall be calculated as follows:

i. [Dollar Coverage x Payment Rate]
The maximum Indemnity payable shall be 100 percent of the Dollar Coverage.

b. The Payment Rate will be based on the average of the Payment Rates for the Insured’s Selected Weather Station(s).

c. The Payment Rate for the Selected Weather Station(s) will be zero when the Percent of Normal Moisture is equal to or more than the Threshold Moisture. For each 2% decrease that the Percent of Normal Moisture is below the Threshold Moisture, the Payment Rate will increase by 5% of the insured Dollar Coverage.

d. Except at the discretion of AFSC, no changes will be made to the May Moisture, June Moisture, July Moisture or August Moisture values after an Indemnity has been paid.

MDE payment schedule chart

Example: Indemnity calculation

• 200 acres of Hay insured at $20 per acre = $4,000 Coverage

• Option D (25% monthly weighting)

• Number of days with highs of 30 Celsius or higher

o May – 0 days; June – 2 days, July – 5 days; August – 2 days

• Number of days with highs of 35 Celsius or higher

o May – 0 days; June – 0 days, July – 2 days; August – 1 day

MDE example chart for weather stations

*Daily moisture is capped at an amount equal to the Normal Moisture for the month.
**Monthly moisture is capped at 150 percent of the Normal Moisture for the month.
***Rounded down for payment calculation
Measurements that are less than 1.0 mm will be considered 0.0 mm, and will not be included in determining the precipitation for the month.

Monthly calculation of weighted percent of normal (for the month of May)

• Measured moisture divided by Normal Moisture times Weighting Option for each Period of Moisture equals Weighted percent of Normal

• 17 mm / 55 mm x 25% = 7.7%

The weighted percent of normal for each month is added together for the cumulative weighted percent of normal for the long season, then rounded down, is 63 percent or normal.

The MDE Payment Schedule displays the Payment Rate for each Percent of Normal Moisture. The Payment Rate for 63 percent of normal is 45 percent.

Season claim payment calculation

• Total Coverage times payment rate
• $4,000 x 45%
• $1,800

Disclaimer: Daily precipitation received from Alberta Agriculture, Forestry and Rural Economic Development (AFRED) will be rounded to the nearest 0.1 mm.

Export Timothy Hay Insuring Agreement

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AFSC will indemnify the Insured against damage caused by Designated Perils to first-cut pure Timothy Hay grown for the export market 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.

Designated Grade” for Timothy Hay means the grade known as “Choice”, based on “greenness” colour analysis score (> 60 to 80) from the TrueGrade HayScan system technology, or other method or specification determined by AFSC.

Designated Perils” In addition to the Designated Perils in the Terms and Conditions, Article 1: Definitions, Timothy Hay will also be covered for Winterkill Provision.

Grade Factor” means a ratio of prices established by AFSC, based on the price of the grade to the price of the Designated Grade, to adjust Harvested Production and Appraised Potential Production for quality.

Haying Being General in the Area” means the date set by AFSC when provincially the majority of haying has started for the current year.

Insurable Crop” means Timothy Hay grown for the export market.

Timothy Hay” means pure perennial timothy grass, seeded and grown for the export market on irrigated or dryland acres, for mechanical harvesting and for compressed-bale processing.

Uninsured Production” means an Insurable Crop harvested from roadsides, rejected fields, uninsured acreages or land acquired after the insurance deadline.

Export Timothy Hay insurable crops chart

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Coverage is a fundamental part of any insurance Policy and is based upon a long-term average yield.

a. Indexing: is based on a minimum of four years of records. Crops with fewer than four 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 Risk Area 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 Risk Area(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 (HPRs) 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 10 of the most recent yield records for a crop when there are four or more yield records available. Yield records older than 1991 are not used.
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.

Cushioning has the effect of stabilizing Coverage by reducing year-to-year fluctuations. Unusually low yield records will be adjusted upward for the purpose of calculating the Expected Normal Yield for a crop. When a crop yield is less than 70 percent of the Expected Normal Yield, the actual yield will be cushioned and replaced by 70 percent of the Expected 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.

a. An Insurable Crop grown on irrigated land is eligible for separate Coverage if:

i. the crop is grown on fields declared as irrigated;

ii. there is an adequate source of water;

iii. the Insured has reliable irrigation equipment;

iv. adequate irrigation water is applied on a timely basis; and

v. the Insured maintains an up-to-date log showing the dates and approximate amounts of rainfall and irrigation water applied to each Insured Crop.

b. AFSC may reclassify the Insurable Crop as grown on dryland, or apply Uninsured Causes of Loss if:

i. the Insured fails to fulfill all or part of the conditions in subsection a above; or

ii. drought is considered by AFSC to be a contributing cause of loss.

c. Irrigated acres are insured separately from dryland acres of the same crop:

i. acres must be identified as irrigated or dryland; and

ii. production from irrigated and dryland acres must be stored and reported separately.

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 or limit production to the Insured Crop.

a. Spring Insurance Price: One price is offered for both dryland and irrigated Timothy Hay based on the average expected farm gate price for the Designated Grade known as “Choice”.

a. 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.

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

c. Adjustments & Discounts:

Export Timothy Hay adjustments and discounts chart

a. New clients must apply for insurance on or before the last day of February 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 purchased Export Hay Insurance in the previous year will be automatically renewed based upon the previous year’s information. Personalized renewal notices are available in January. The Insured is responsible to review their information and if changes are required, complete a Change Request form and return the form to an AFSC insurance representative by mail, fax, email, in person or request changes by phone by the last day of February.

c. Coverage Level: Coverage Levels of 70 or 80 percent can be elected;

i. The same Coverage Level must be selected for dryland and irrigated Timothy Hay.

d. Crop Information: Land Locations by field, the date the field was seeded and the number of acres in the field.

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Coverage only applies to first-cut pure Timothy Hay grown for the export market on both dryland and under irrigated in Designated Areas only.

This Insuring Agreement does not provide Coverage for the following:

a. Timothy Hay in the year it is seeded;

b. Timothy Hay pastured after the start of the Crop Year, or improperly managed by grazing, or pastured consecutively in the previous two years;

c. Timothy Hay grown on land subject to repeated flooding or where excess moisture is a recurring problem; or

d. straw from timothy grown for seed.

This Insuring Agreement has coverage for Winterkill Provision when the following conditions are met:

a. The acres are insured in the current year; and

b. The acres were insured in the previous year; and

c. Acres have not had more than five years of production.

a. The Insurable Crop may be subject to an acceptance inspection and AFSC may, at its discretion, change Coverage or reject insurance.

b. If Timothy Hay acres are rejected, these acres can be insured under Hay Insurance as grass when the Insured has an active Hay Insurance subscription, or

c. If the acres will be pastured, they can be insured under pasture insurance when the Insured has an active Moisture Deficiency Insurance or Satellite Yield Insurance as improved pasture. Rejected acres can be transferred to the active pasture insurance program and the Election revised as needed.

 

Reasons acceptance inspections are completed for Export Timothy Hay include:

– Timothy Hay fields in the first year of production
– Newly insured fields
– Timothy Hay stands older than 5 years
– Timothy Hay fields that were fall/winter grazed between harvest and the last day of February
– Other risk criteria as determined by AFSC

The Variable Price Benefit is 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.

Export Timothy Hay reporting deadlines chart

Other important deadlines

Export Timothy Hay other deadlines chart

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a. All acreage managed as Timothy Hay (dryland and irrigated), whether owned, rented or leased, must be insured, and there is a minimum of 20 acres for this Insuring Agreement.

b. Insured acres are not insurable under any other crop insurance program, except when AFSC has consented in writing.

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:

a. When completing acceptance inspections or acreage verification, 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.

b. When completing all other inspections:

i. 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.

ii. if the measured acres are outside the Acreage Tolerance compared to acreage reported, 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.

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

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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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.

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

AFSC reserves the right to deny additional Coverage when information contained on the Statement of Coverage and Premium reflects what is reported by the last day of February.

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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 within 15 days of completing harvest and not later than October 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.

After an inspection, pursuant to subsection 7.02c, if the Insured, within seven days of service of the Inspection Report:

a. advises AFSC of the Insured’s disagreement with the report, and

b. 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, or re-grading of samples.

a. Acreage of Insured Crop 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 baling dry, measurable bales 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. If an Insured Crop is eligible for the Winterkill Provision and is Put to Another Use due to winterkill:

i. the Appraised Potential Production will be an amount no less than one-half of Coverage on the acres Put to Another Use provided the acreage was first assessed by AFSC.

ii. Alternatively, Premiums may be refunded and these acres become eligible for annual crop insurance, subject to the Terms and Conditions and the Insuring Agreement for the annual Insurable Crop.

h. If an Insured Crop is intended to be ploughed under or sprayed out prior to Haying Being General in the Area, the Insured must provide AFSC with prior notification to obtain release.

i. If the released Timothy Hay acres are subsequently seeded to an elected annual crop, these acres can be transferred to an annual crop Policy subject to the Terms and Conditions and the Insuring Agreement for the annual Insurable Crop.

ii. If the released acres are not seeded to an elected annual crop, the acres will remain insured under the Export Hay Policy; AFSC will deem the Appraised Potential Production to be zero, and the uninsured loss to be equal to Coverage.

i. If Insured Crop is Put to Another Use on or after Haying Being General in the Area and with prior authorization from AFSC, Coverage and Premium on this acreage will remain in effect and AFSC will apply the Appraised Potential Production.

j. Insured must not dispose of an Insured Crop or put it to a use other than baling in dry, measurable bales, without AFSC releasing acres, as it may negatively impact their insurance. Once authorized by AFSC, the Insured may leave Exclosures or standing Inspection Strips if putting acres to another use.

k. Where standing Inspection Strips or Exclosures are authorized by AFSC for all inspection types, the Insured is required to leave standing 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.

Inspection Strips are representative standing strips 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.

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

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

c. 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.

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.

a. A minimum of two sites for fields up to 40 acres,

b. A minimum of one site for every additional 40 acres in that item, is required.

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.

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. Failure to adhere accepted agronomic practices including but not limited to the following;

i. proper application of the required nitrogen; or

ii. proper control of weeds and foreign materials; or

iii. proper application of irrigation water if insured under irrigation.

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. damage resulted from winter grazing;

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 Timothy Hay, including purchased inventory and Uninsured Production, stored on or off the farm must be declared to AFSC via the Report of Timothy Hay in Storage Prior to Harvest form prior to commencing harvest and not later than July 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 Inventory, 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.

a. 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 hay purchases.

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a. An HPR must be submitted to a branch office within 15 days of completing harvest, and no later than October 15.

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

c. The Insured is required to provide:

i. Export Timothy inventory by field, lot & grade form, including grade, weight and % of moisture;

ii. On the HPR;

1) Carryover Inventory – changes in Carryover Inventory from what was reported on the Report of Timothy Hay in Storage Prior to Harvest form;

2) Field documentation information including preharvest, pastured, plowed down, or abandoned acres.

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

4) Uninsured Production;

5) Number of harvested acres

6) Number of lots and number of bales

7) Date harvest was completed; and

8) Number and type of bales stored, fed, or sold.

d. Harvested Production shall be separated by grade, and moisture is standardized to 10 percent by weight.

e. Harvested Production is determined by averaging the weight of representative bales by grade from the insured acreage.

f. If cut Timothy Hay is not baled because of very poor quality, AFSC will apply, in its discretion, a low utility grade on the Appraised Potential Production.

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

h. When there is a production shortfall, the Insured is required to contact AFSC prior to selling any insured Timothy Hay.

i. 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.

j. The Insured may request corrections or revisions to the existing Harvested Production Report record for a Crop Year, up to March 1 of the following year by providing supporting documentation that is satisfactory to AFSC.

a. Where, after the Harvested Production Report is filed, total production of an Insured Crop is less than total Coverage after consideration of percent of moisture and grade, AFSC will determine Adjusted Production.

b. 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 weight and moisture content that the final cash purchase tickets will be issued on.

c. If Timothy Hay is sold prior to AFSC taking representatives samples, there will be no grade adjustment applied, grade will be set at Designated Grade known as “Choice”.

d. When irrigated acres are in a production shortfall, the Insured will be asked to provide an irrigation log showing dates of precipitation and approximate amounts of water applied.

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 a field inspection. The adjuster will:

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

ii. Identify acres harvested; and

iii. Determine the quantity of the crop harvested and review 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 generated.

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 AFSC may assign Uninsured Causes of Loss up to Coverage or prorate production.

c. AFSC may pro-rate or combine the production if the Insured fails to retain:

i. insured production separate from Uninsured Production;

ii. different grades of production separate from other grades of production;

iii. insured production separate from production of another producer;

iv. Harvested Production separate from Carryover Inventory;

v. irrigated production separate from dryland production; or

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

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The Insurable Period begins at the start of the Crop Year and shall end at the earlier of:

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

b. the date the Insurable Crop is harvested; or

c. October 15 of the year in which the Insurable Crop would normally have been harvested.

a. Prior to Haying Being General in the Area, as determined by AFSC, an Indemnity will be calculated as follows:

i. if selected by the Insured, a Premium refund on damaged acres; or

ii. an Indemnity not to exceed 50 percent of the Dollar Coverage by crop; or

iii. Appraised Potential Production shall not be less than 50 percent of Coverage by crop.

b. If only a portion of the total acreage of an Insured Crop is released because of damage, the appraisal will be added to the Adjusted Production from the remaining acreage of the Insured Crop.

c. Once all the Harvested Production and Appraised Potential Production for the Insured is reported for the year:

i. If the Insured incurs a loss from Designated Perils on or before October 15 in each year, the Indemnity for the Timothy Hay will be calculated as follows:

1) [(Coverage – Adjusted Production ) x Insurance Price] – Wildlife Damage Compensation Program payments.

ii. AFSC will apply, in its discretion, the Appraised Potential Production, and a Grade on the Appraised Potential Production if the Insured has not completed harvest on or before October 15.

Moisture Deficiency Insurance Insuring Agreement

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AFSC will indemnify the Insured when Percent of Normal Moisture is less than the Threshold Moisture at the Selected Weather Station(s) for the Insured’s dryland pasture 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.

Moisture Deficiency Insurance (MDI) is an area-based program that provides Coverage on specific pasture types. This program uses precipitation information from a network of weather stations across the province to reflect moisture conditions. Conditions at the weather stations may not reflect conditions on the insured fields.

August Moisture” is the amount of precipitation, as determined by AFSC, for the month of August, for a Selected Weather Station(s).

Bush Pasture” means dryland Native Pasture on which at least 60 percent of the area is covered by trees, as determined by AFSC.

Community Pasture” means Native or Improved Pasture on dryland that is communally grazed and for which insured acreage is determined by the number of animal units allocated by grazing season.

Designated Peril” means lack of moisture at the Selected Weather Station(s). For greater clarity, this is the only Designated Peril under this Insuring Agreement, and the Designated Perils listed under Article 1 of the Terms and Conditions do not apply to this Insuring Agreement.

Dollar Coverage” means 80 percent of the long-term average yield for the Insurable Crop for the Risk Area, multiplied by the Insurance Price elected by the Insured, multiplied by the number of acres insured.

Full Season” means all Periods of Moisture in the Weighting Option elected by the Insured.

Improved Pasture” means dryland perennial grasses and legumes growing on fenced land for the purpose of grazing livestock and where at least 60 percent of seeded species are still represented.

Insurable Crop” means Native Pasture, Improved Pasture, Bush Pasture, or Community Pasture.

June Moisture” is the amount of precipitation, as determined by AFSC, for the month of June, for a Selected Weather Station(s).

July Moisture” is the amount of precipitation, as determined by AFSC, for the month of July, for a Selected Weather Station(s).

May Moisture” is the amount of precipitation, as determined by AFSC, for the month of May, for a Selected Weather Station(s).

Native Pasture” means dryland vegetation growing on fenced land for the purpose of grazing livestock and where at least forty (40) percent of grass species on that land are native to the surrounding area.

Normal Moisture” for each Period of Moisture is the long-term average amount of moisture, as determined by AFSC, for a Selected Weather Station(s).

Normal Precipitation” means the long-term average precipitation, as determined by AFSC, for a Selected Weather Station(s).

Payment Rate” means the rate of compensation at which the Insured is indemnified, as determined by AFSC.

Percent of Normal Moisture” means, for the Selected Weather Station(s) for the current year, the sum of the May Moisture, June Moisture, July Moisture, and August Moisture, expressed as a percent of their respective Normal Moisture, with each period of moisture weighted by the Weighting Option elected by the Insured.

Period of Moisture” is the period for which moisture is measured for this insurance program. There are four different periods: May, June, July and August.

Selected Weather Station” means eligible weather station(s) elected, to a maximum of three, by the Insured and approved by AFSC.

Split Season” means the split of the Full Season period in two, as elected by the Insured.

Threshold Moisture” is the Percent of Normal Moisture for a Selected Weather Station(s) below which insurance payments begin. The Threshold for the Split Season is 70 percent while the Threshold for the Full Season is 80 percent.

Weighting Option” is the option elected by the Insured to apply specified percentages to the percent of normal moisture for each Period of Moisture.

MDI insurable crops chart

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a. Each Risk Area has a long-term average yield for each pasture type based on recommended cattle-carrying capacity. For Community Pastures, Coverage is based on the Risk Area cattle-carrying capacity and the Insured’s allocation for that pasture.

b. Eighty percent of the Risk Area long-term average yield is used as the base yield, setting Coverage for each Insured in the Risk Area. The selected high or low price option, multiplied by the base yield for each insured pasture type in the Risk Area, establishes the Dollar Coverage for each pasture type.

AFSC will use precipitation data provided by the Alberta Government ministry responsible for Agriculture. If AFSC is not able to do the assessment due to insufficient data being provided, this Insuring Agreement will cease to be enforceable against AFSC and cease to have any effect against AFSC. AFSC will then return to the Insured all paid Premiums.

a. Spring Insurance Price: this Insuring Agreement has the option of two Spring Insurance Prices, a low and a high price, based on forecasted hay market price and transportation costs for the year.

b. Fall Market Price: this Insuring Agreement uses hay as a proxy crop and is based on Alberta Agriculture, Forestry and Rural Economic Development’s hay price from the Farm Input Survey for the month of October.

c. Variable Price Benefit: is offered to protect against price fluctuations between the Spring Insurance Price and the fall price. See Benefits document for information.

a. Rates: Premium rates are set annually based upon long-term weather station data and reflect AFSC’s risk of future losses. Premium rates vary by weather station. The Insured’s Premium is calculated by multiplying the Dollar Coverage by the Insured’s share of the premium rate and applying any applicable discounts. If more than one weather station is elected by the Insured, the premium rate will be based on the average of the premium rates for the Selected Weather Station(s).

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

c. Adjustments & Discounts:

MDI adjustments and discounts chart

 

a. New clients must apply for insurance on or before the last day of February 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 purchased Moisture Deficiency Insurance in the previous year will be automatically renewed based upon the previous year’s information including land locations and acres. Personalized renewal notices are available in January. The Insured is responsible to review the information, and if changes are required complete the Change Request Form online or return the form to an AFSC insurance representative by mail, fax, email, in person or request changes by phone by the last day of February.

c. Pasture type: Insurable dryland pasture crops include Native Pasture, Improved Pasture and Bush Pasture. Community Pasture and Forestry Grazing Leases are optional.

d. Pricing Options: The Insured has the option of electing a high price or low price option.

e. Length of Season: The Insured chooses between short split season or long split season, that best represents pasture growth and supports their management strategies. Split Season allows the Insured to divide their growing season and Dollar Coverage into two parts:

i. Short Split Season option: the early split includes precipitation from May 1 through June 15, and the late split includes precipitation from June 16 through July 31.

ii. Long Split Season option: the early split includes precipitation from May 1 through June 30, and the late split includes precipitation from July 1 through August 31.

Clients could be eligible for an insurance payment on one part of the season regardless of what happens in the other.

MDI season length chart

f. Weighting Option: The Insured has the choice of different Weighting Options within the growing season. Based on the weighting percentages, there are four season options available to select:

MDI season options chart

Weighting the precipitation in each month allows you to select the Weighting Option that best reflects your area, crop type and management practices.

a. A network of weather stations is established across the province. Rainfall for the current year is compared to historical rainfall (normal) for the same growing period at the Selected Weather Station(s) to determine a claim.

b. The Insured can choose up to three weather stations from the network of eligible weather stations that best represent the conditions on their farm and within proximity of their land base. The Insured is not allowed to skip a weather station, and Selected Weather Station(s) are subject to approval by AFSC.

c. Precipitation used to calculate a claim payment for the current year is limited by the following rules:

i. Daily recorded precipitation at a Selected Weather Station(s) is capped at an amount equal to the Normal Precipitation for the month;

ii. Monthly recorded precipitation at a Selected Weather Station(s) is capped at an amount equal to one and a half times the Normal Precipitation for that month; and,

iii. Daily precipitation measurements under 1.0 mm will be considered 0.0 mm, and will not be included in determining the precipitation for the month.
iv. This Insuring Agreement includes an extreme temperature trigger that will deduct from the monthly recorded precipitation of the Selected Weather Station(s):

1) 1.0 mm for each day the temperature is 30 Celsius or higher

2) an additional 2.0 mm (3.0 mm total) for each day the temperature is
35 Celsius or higher

d. Precipitation is recorded at the Selected Weather Station(s). Precipitation in millimeters (mm) at the weather station for the current year is compared to the Normal Precipitation in mm recorded for the same weather station(s). Both the actual and normal amounts are weighted by the option selected at the same weather station(s). This comparison describes a ‘percentage of normal’, which, if less than the allowable Threshold Moisture percent of normal, initiates a claim payment.

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a. A person who has a direct or indirect conflict of interest with precipitation data provided at one or more Selected Weather Station(s) used for Moisture Deficiency Insurance shall not purchase insurance based upon the data from the weather station for which the person may have a conflict. A person may be in conflict of interest if the person is involved in providing, either directly or indirectly, weather data for a weather station.

b. Only pasture land in Alberta is insurable under this Insuring Agreement.

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

MDI reporting deadlines chart

Other important deadlines

MDI other deadlines chart

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a. All acres of an elected Insurable Crop, whether the land is owned, rented or leased, must be insured, and there is a minimum of 20 acres for this Insuring Agreement.

a. Insured pasture acres are not insurable under Satellite Yield Insurance or any other crop insurance program, except where AFSC has consented in writing.

a. Insured acreage for Community Pasture will be based on the Risk Area livestock carrying capacity as determined by AFSC.

b. Community Pastures and forestry grazing leases are optional to insure.

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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.

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

a. AFSC reserves the right to deny additional Coverage when information contained on the Statement of Coverage and Premium reflects what is reported by the last day of February.

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The Insured is not required to submit a Notice of Loss to initiate a claim. Payments under this Insuring Agreement are based on a comparison between annual measured precipitation at the Selected Weather Station(s) relative to the long-term average precipitation for the same station(s), described as a Percent of Normal. If the Percent of Normal is less than the allowable Threshold Moisture, an indemnity is automatically paid.

a. Upon calculation of a claim for loss, AFSC will serve the Insured with a Statement of Loss.

b. If the calculation of a claim for loss results in no payment, the Statement of Loss 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.

After an inspection, pursuant to subsection 7.02c, if the Insured, within seven days of service of the Inspection Report:

a. advises AFSC of the Insured’s disagreement with the report, and

b. 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. After the start of the Crop Year, if an Insured Crop is intended to be ploughed down or sprayed out, the Insured must provide AFSC with prior notification to obtain release.

b. If the released pasture acres are subsequently seeded to an elected annual crop, then these acres can be transferred to an annual crop Policy, subject to the Terms and Conditions, and the Insuring Agreement for the annual Insurable Crop.

c. If the released acres are not seeded to an elected annual crop, AFSC will continue to view the released acres as insured with Premium and Coverage remaining in force and deem the potential Indemnity to be [Dollar Coverage x Payment Rate].

a. Service of the 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 for which a loss has been made, service of the 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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Losses are paid when accumulated precipitation at the Selected Weather Station(s) falls below the Normal Precipitation for that weather station according to the payment schedule.

a. An Indemnity for each Insurable Crop shall be calculated as follows:

i. [Dollar Coverage x Payment Rate]
The maximum Indemnity payable shall be 100 percent of the Dollar Coverage.

b. The Payment Rate will be based on the average of the Payment Rates for the Insured’s Selected Weather Station(s).

c. The Payment Rate for the Selected Weather Station(s) will be zero when the Percent of Normal Moisture is equal to or more than the Threshold Moisture. For each 2% decrease that the Percent of Normal Moisture is below the Threshold Moisture, the Payment Rate will increase by 5% of the insured Dollar Coverage.

d. Except at the discretion of AFSC, no changes will be made to the May Moisture, June Moisture, July Moisture or August Moisture values after an Indemnity has been paid.

e. This Insuring Agreement includes a Full Season Indemnity comparison that generates an additional payment if the Full Season calculates more than the sum of the Split Season options.

i. When the claim payments are calculated, each Split Season claim payment is calculated and added together for the total Indemnity.

ii. Then the Full Season payment is calculated using the corresponding weighting option without the Split Season.

iii. If the Indemnity for the Full Season is higher than the combined Split Season Indemnity, the Insured will receive the additional amount at the end of the season.

f. The total Indemnity paid is the greater of the combined Split Season indemnities or the Full Season indemnity.

MDI payment schedule chart

Example: Indemnity calculation

• 1,000 acres of improved pasture insured at $50 per acre = total Coverage $50,000

• Option B selected; Short Split Season (May, June, July precipitation)

• Number of days with highs of 30 Celsius or higher

o May – 0 days; June – 2 days (June 20 & 21); July – 5 days

• Number of days with highs of 35 Celsius or higher

o May – 0 days; June – 0 days, July – 2 days

Coverage is split to match the season option chosen.

Early Split Coverage
Total Coverage x (May Moisture Weighting + half of June Moisture Weighting)
= $50,000 x (40% + 15%)
= $50,000 x 55% = $27,500 Coverage

Late Split Coverage
Total Coverage x (half of June Moisture Weighting + July Moisture Weighting)
= $50,000 x (15% + 30%)
= $50,000 x 45% = $22,500 Coverage

MDI examples for weather stations

*Daily moisture is capped at an amount equal to the normal moisture for the month
**Monthly moisture is capped at 150 percent of the normal moisture for the month.
***Rounded down for payment calculation

Measurements that are less than 1.0 mm will be considered 0.0 mm, and will not be included in determining the precipitation for the month

Monthly Calculation of Weighted % of Normal (for the month of May)
Weighted % of Normal = Measured Moisture / Normal Moisture x Monthly Weighting
= 17 / 55 x 40%
= 12.4%

Early Split
= 12.4% + 22.9%
= 35.3% / 55% of Coverage
= 64.2% or 64% of normal
Early Split of 64% of normal results in a payment rate of 15% = $27,500 x 15% payment rate = $4,125

Late Split
= 17.7% + 12.6%
= 30.3% / 45% of Coverage
= 67.3% or 67% of normal
Late Split of 67% of normal results in a payment rate of 10% = $22,500 x 10% payment rate = $2,250

Total Split Season Indemnity
$4,125 + 2,250 = $6,375
Then the payment for the Full Season is calculated and if it is higher than the sum of the Split Season payments, the client will receive the extra amount at the end of the season.

Full Season Comparison
= 12.4% + 22.9% + 17.7% + 12.6% = 65.6% or 65% of normal
Full Season of 65% of normal results in a payment rate of 15% = $50,000 x 15% = $7,500

Additional Indemnity Full Season less the total Split Season indemnity = $7,500 – $6,375 = $1,125
As the full season indemnity calculates higher than the total split season indemnity, an additional payment of $1,125 would be made at the end of the season.

Disclaimer: Daily precipitation received from Alberta Agriculture, Forestry and Rural Economic Development (AFRED) will be rounded to the nearest 0.1 mm.

Satellite Yield Insurance

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AFSC will indemnify the Insured when the Current Year Pasture Vegetation Index, expressed as a percentage of the Normal Pasture Vegetation, is less than the Threshold Pasture Vegetation index in the township for the Insured’s dryland pasture 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.

Satellite Yield Insurance (SAT) is an area-based program which provides coverage on specific pasture types. This program uses satellite measurements of light absorbed and reflected by the pasture vegetation to estimate pasture growth. Annual pasture growth and the extent of loss within the township are considered to be the same for each Insured.

Bush Pasture” means dryland Native Pasture on which at least 60 percent of the area is covered by trees, as determined by AFSC.

Community Pasture” means Native or Improved Pasture on dryland that is communally grazed and for which insured acreage is determined by the number of animal units allocated by grazing season.

Current Year PVI” means the sum of the weekly PVI, as determined by AFSC, for the selected Insuring Weeks in the current year.

Designated Peril” The Designated Perils listed under Article 1 of the Terms and Conditions do not apply to this Insuring Agreement. Rather it is based on the shortfall of the Pasture Vegetation Index (PVI) as defined in this Insuring Agreement.

Dollar Coverage” means 80 percent of the long-term average yield for the Insurable Crop for the Risk Area, multiplied by the Insurance Price elected by the Insured, multiplied by the number of acres insured.

Full Season” means the option which includes all the weeks in the Period of Insurance elected by the Insured.

Improved Pasture” means dryland perennial grasses and legumes growing on fenced land for the purpose of grazing livestock and where at least 60 percent of seeded species are still represented.

Insurable Crop” means Native Pasture, Improved Pasture, Bush Pasture, or Community Pasture.

Insuring Week” means every consecutive seven days beginning the second Monday in May.

Native Pasture” means dryland vegetation growing on fenced land for the purpose of grazing livestock and where at least forty (40) percent of grass species on that land are native to the surrounding area.

Normalized Difference Vegetation Index” referred to as “NVDI” means a township-based vegetation index, as determined weekly by Statistics Canada for land that is predominantly pasture.

Normal NDVI” means the long-term average NDVI, as determined by AFSC, for the selected Insuring Weeks.

Normal PVI” means the long-term average PVI, as determined by AFSC, for the selected Insuring Weeks.

Pasture Vegetation Index” referred to as “PVI” means a township-based vegetation index that is calculated weekly as [NDVI – (0.80 x Normal NDVI] in the current year.

Normal Moisture” for each Period of Moisture is the long-term average amount of moisture, as determined by AFSC, for a Selected Weather Station(s).

Payment Rate” means the rate of compensation at which the Insured is indemnified, as determined by AFSC.

Percent of Normal PVI” means the average of the weekly PVI compared to the average of the weekly Normal PVI for the township for the current year.

Period of Insurance” means the Insuring Weeks that the Insured selects to calculate an Indemnity.

Split Season” means the option to split the Full Season into two, as elected by the Insured.

Threshold PVI” means 90 percent of the Normal PVI for the Full Season option and 85 percent for the Split Season option.

Weighting Option” is the option elected by the Insured to apply specified percentages for each Period of Moisture.

SAT insurable crops chart

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a. Each Risk Area has a long-term average yield for each pasture type based on recommended cattle-carrying capacity. For Community Pastures, Coverage is based on the Risk Area cattle-carrying capacity and the Insured’s allocation for that pasture.

b. Eighty percent of the Risk Area long-term average yield is used as the base yield, setting Coverage for each Insured in the Risk Area. The selected high or low price option, multiplied by the base yield for each insured pasture type establishes the Dollar Coverage for each pasture type insured

This Insuring Agreement is subject to the availability of data for determining the NDVI. If the data is not available, this Insuring Agreement will cease to be enforceable against AFSC and cease to have any effect against AFSC. AFSC will then return to the Insured all paid Premiums. At the discretion of AFSC, adjustments may be made for lack of data due to environmental conditions.

a. Spring Insurance Price: SAT offers two spring insurance prices, a low and a high price, based on forecasted hay market prices and transportation costs for the year.

b. Fall Market Price: SAT uses hay as a proxy crop and is based on Alberta Agriculture, Forestry and Rural Economic Development’s hay price from the Farm Input Survey for the month of October.

c. Variable Price Benefit: is offered to protect against price fluctuations between the Spring Insurance Price and the fall price. See Benefits document for information.

a. Rates: Premium rates are set annually to reflect AFSC’s risk of future losses and vary by eligible Risk Area and season option. The Insured’s portion of the Premium is calculated by multiplying the dollar Coverage by the Insured’s share of the premium rate and any applicable adjustments.

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

c. Adjustments & Discounts:

SAT adjustments and discounts chart

a. New clients must apply for insurance on or before the last day of February 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 purchased Satellite Yield Insurance in the previous year will be automatically renewed based upon the previous year’s information including land descriptions and acres. Personalized renewal notices are available in January. The Insured is responsible to review the information, and if changes are required complete the Change Request Form online or return the form to an AFSC insurance representative by mail, fax, email, in person or request changes by phone by the last day of February.

c. Pasture type: Insurable dryland pasture crops include Native Pasture, Improved Pasture and Bush Pasture. Community Pasture and Forestry Grazing Leases are optional.

d. Pricing Option: The Insured has the option of electing a high price or low price option.

e. Length of Season: The Insured can choose between the short or long Full Season, or the Split Season option which allows the Insured to divide their growing season and Dollar Coverage into two parts:

i. Short Full Season: mid-May until late July including weeks 1 – 11; or

ii. Long Full Season: mid-May until late August including weeks 1 – 15; or

iii. Split Season option: An indemnity is calculated for each split and one is not offset against the other. The Insured pay an addition Premium for this option.

SAT season chart

f. Weighting Option: Insureds who elect a Split Season has the choice of different Weighting Options within the growing season, and can divide their Coverage by either:

i. Allocating 60 percent of Coverage to the weeks included in the early split, and 40 percent of Coverage to the weeks included in the late split, or

ii. Allocate 50 percent of Coverage equally to the weeks included in each part.
SAT season options chart

 

Weighting the precipitation in each month allows you to select the Weighting Option that best reflects your area, crop type and management practices.
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a. AFSC will use a network of cage sites to monitor and estimate pasture plant growth. This information may be used to augment the satellite information to revise Payment Rates, at the discretion of AFSC.

b. Only pasture land in Alberta is insurable under this Insuring Agreement.

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

SAT reporting deadlines chart

Other important deadlines

SAT other deadlines chart

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a. All acres of an elected Insurable Crop, whether the land is owned, rented or leased, must be insured, and there is a minimum of 20 acres for this Insuring Agreement.

a. Insured pasture acres are not insurable under Moisture Deficiency Insurance or any other crop insurance program, except where AFSC has consented in writing.

a. Insured acreage for Community Pasture will be based on the Risk Area livestock carrying capacity as determined by AFSC.

b. Community Pastures and forestry grazing leases are optional to insure.

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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.

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

a. AFSC reserves the right to deny additional Coverage when information contained on the Statement of Coverage and Premium reflects what is reported by the last day of February.

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