Agriculture Financial Services Corporation (AFSC) provides coverage for pasture based on conditions in the area, typically based upon an indicator of production loss, such as precipitation or satellite imagery. This coverage is not directly related to losses to insured fields.
Moisture Deficiency Insurance
Moisture Deficiency Insurance is an area-based program which provides coverage on pasture. This program uses precipitation information from weather stations to reflect moisture conditions across the province.
Losses are paid when accumulated precipitation at a selected weather station(s) in a given year falls below the normal expected precipitation for that weather station according to the payment schedule. Pasture acres insured under this program cannot be insured under Satellite Yield Insurance.
Satellite Yield Insurance
Satellite Yield Insurance losses are paid when the determined annual township-wide pasture growth falls below the insured normal pasture growth for the specified area. Coverage is restricted to nine risk areas in southern Alberta.
It does not cover individual farm losses. Annual pasture growth and the extent of loss within the township are considered to be the same for each client. Pasture acres insured under this program cannot be insured under Moisture Deficiency Insurance.
Satellite Yield Insurance has two prices based upon a forecast of hay market prices for the year, allowing clients to customize their insurance.
Variable Price Benefit
The Variable Price Benefit is included in Satellite Yield Insurance and Moisture Deficiency Insurance. It increases the dollar coverage if there has been a significant increase in the cost of hay during the growing season. However, it only pays the Variable Price Benefit if the township growth determination or accumulated normal moisture for the current year is less than the long-term average. Alberta Agriculture and Forestry’s hay price from the Farm Input Survey for the month of October is used to determine the Variable Price Benefit trigger as pasture is a difficult commodity to price accurately. The fall market price of hay reported for the month of October must increase by at least 10 per cent about the production insurance spring price for hay for the benefit to trigger. The indemnities are paid using the increased price up to a maximum increase of 50 per cent.