Pick plans for fresh vegetables

Pick plans for fresh vegetables

Production InsurancePlan Overview

Fresh Market Vegetable Production

Connecting producers with programs

A b O u t P R O D u C t I O N I N S u R A N C EAgricorp administers Production Insurance (PI) on behalf of the Government of Ontario and Agriculture and Agri-Food Canada. Production Insurance is available for 90 commercially grown crops in Ontario in the following sectors:• Forage• Fruitandhoney• Grains• Oilseeds• Vegetables• Seedcorn,sugarbeets,hempandtobacco

A b O u t t h I S P u b l I C At I O NThe purpose of this overview is to provide general information about the fresh market vegetable plans available under Production Insurance.Itincludesplan-specificfeatures,customers’responsibilities,and general deadlines. This plan overview contains general information only and does not represent an insurance contract. Information contained within it is subject to change. Refer to the following for additional information about the PI plan for fresh vegetable crops:1. Contract of Insurance 2. Production Insurance information sheets for the current plan year3. Production Insurance documents:

• PepperSalvageBenefit• FMV-ALIntendedCropPlantingSheet• FMV-ALGradingStandards• FMV-ALInsurableValuesandAbandonmentThresholds

Forcopiesofthesedocuments,visit agricorp.com or call Agricorp at 1-888-247-4999.Plan overviews are also available for the following crops:• Grainandoilseedproduction• Honeyproduction• Treefruitandgrapeproduction• Processingvegetablesproduction• Seedcornproduction• Strawberryproduction

What you need to know about protecting your fresh market vegetables under Production Insurance.

AsanagencyoftheGovernmentofOntario,Agricorpworkswith partners to contribute to a vibrant and sustainable agriculture industry. We deliver programs that help producers manage risk and remain financially secure.

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P r o d u c t i o n i n s u r a n c e P r o g r a m f o r f r e s h m a r k e t V e g e ta b l e s

Table of contentsSECtION I: Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Why should I have Production Insurance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2how do I get PI coverage? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2What types of insurance coverage are available?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Which crops are covered under each plan? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4What are my responsibilities? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

SECtION II: Yield-based vegetable plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8What are the plan details? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8how is PI coverage determined?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Evan Farm Example I: Calculating AFY for new customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Evan Farm Example II: Yield buffering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Evan Farm Example III: Determining guaranteed production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15how are PI premiums determined? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Evan Farm Example IV: Calculating discount or surcharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Evan Farm Example V: Calculating annual premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18What happens when a crop is damaged? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Evan Farm Example VI: Calculating a production claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Evan Farm Example VII: Calculating a USAB claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Evan Farm Example VIII: Calculating a reseeding benefit claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Evan Farm Example IX: Calculating a pepper salvage benefit claim . . . . . . . . . . . . . . . . . . . . . . . . 22

SECtION III: Fresh market vegetable acreage loss plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23What are the plan details? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Leigh Acres Example I: Choosing insurable values. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25how is PI coverage determined?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Leigh Acres Example II: Calculating total insurable value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26how are PI premiums determined? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Leigh Acres Example III: Calculating annual premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27What happens when a crop is damaged? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28types of claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Leigh Acres Example IV: Calculating a special protection claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Leigh Acres Example V: Calculating an emergency measures claim . . . . . . . . . . . . . . . . . . . . . . . . 32 Leigh Acres Example VI: Calculating an abandonment claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

SECtION IV: how do I resolve a PI dispute? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

APPENDIx A: Comparison of plan types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

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SEC tION I : Overview

Why should I have Production Insurance?As a producer, you have to deal with many factors that are beyond your control. Things like adverse weather, disease, wildlife, and insect infestations can have a serious impact on your production and your income.Production Insurance (PI) adds a measure of predictability to an unpredictable business. It protects your business from yield reductions and crop losses caused by insured perils. More than 16,000 Ontario producers with more than five million acres of farmland enjoy the financial security provided by PI.

Production Insurance helps you:• Maintainyourcashflowinpoorcropyearswithclaimpaymentsthatcompensateyoufor

crop damage or low yields• Manageyouroperationwithamorepredictablecashflow• Providecollateralrequiredtosecureloans• StabilizeyourAgriStabilityprogramreferencemarginovertime• Gainaffordablepeace-of-mindbypayingtax-deductiblepremiumsthatarecost-shared

with government

the AgriStability and PI connection AgriStability, which protects your farm against large margin declines, and PI are complementary programs that address different risks faced by Ontario producers. Participating inbothAgriStabilityandPIletsyoumaximizethebenefitsofgovernmentriskmanagementprograms available to you:• PIclaimpaymentscountasincomeincalculatingyourAgriStabilityreferencemargin• Dependingonweatherand/ormarketconditions,inagivenyearyoucouldreceivean

AgriStability benefit, a PI claim – or both.

How do I get PI coverage?New applicationsIf this is your first time applying, contact Agricorp at 1-888-247-4999. An Agricorp representative will then visit you to review your coverage and claim price options and complete your application.

RenewalsIf you already have PI coverage, a renewal notice will be sent to you in February that outlines your coverage based on your previous year’s policy.

SeeWhat are my responsibilities? on page 6 for applicationdeadlines, coveragechanges,or coverage cancellation.

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What types of insurance coverage are available?There are two basic types of Production Insurance for fresh market vegetables: 1. Total production coverage 2.Freshmarketvegetableacreageloss(FMV-AL)

Total production coverage

Total production coverage insures the total planted acres of a given crop. If your actual yield is less than your guaranteed level of production, a production claim may be paid on the shortfall. Total production coverage offers these overall advantages:• Multiplebenefits• Claimpaymentsforincrementallossesonthetotalacresgrown(paymentsizedependson

coverage level option selected)

Total production insurance is available through our yield based plans:

Yield-based vegetable plansYour coverage is based on comparing your actual yields against an average of your historical yields for each individual crop. Advantages of this plan include:• Multiplebenefits: - Productionclaim - Unseededacreagebenefit - Reseedingbenefit - Salvagebenefit(bellandbananapeppersonly)• Coveragebasedonyourowngrowingexperience• Crop-specificcoveragelevels,claimprices,andpremiumrates• Bufferingtosmoothoutextremeyieldconditions• Potentialforapremiumdiscount,dependingonhowyourclaimhistorycomparesto

the history of the plan

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Fresh market vegetable acreage loss planThefreshmarketvegetableacreageloss(FMV-AL)planprovidesinsurancecoverageformajorlosses experienced at the field level. Losses are compared against predetermined abandonment thresholds,whicharebasedonthecropyieldsrequiredtomeetproductioncostsforatypicalfield of that crop. If your yield falls below the threshold level due to an insured peril, a claim may be paid.Advantages of this plan include:• Multiplebenefitsthroughouttheseason: - Specialprotectionclaim - Emergencymeasuresclaim - Abandonmentclaim• Separatecoverageformultipleplantingsofshort-

season crops• Single-peril(hailorfrost)coverageorcombinedhail

and frost coverage• Spot-lossprotection(insurancecoverageappliesonaperacrebasis,ratherthantotalacreage)• Claimsarepaidattimelyperiodsthroughoutthegrowingseason• Inmostcases,allowsforcropsalvagewithoutaffectingcompensation

Which crops are covered under each plan?C R O P Y I E l D -

b A S E DF M V - AC R E Ag E lO S S

F R u I t l E A F Y R O Ot Ot h E R

Asparagus •Broad beans •Broccoli •Brussels sprouts •Bok choy •Cabbage •Carrots • •Cauliflower •Celeriac •Celery •Chinese cabbage •Cucumbers •Eggplant •French shallots •Gailan •Garlic •Greenandwaxbeans •

For more detailed information on the differences between yield-based vegetable plansandFMV-ALplans, please see APPENDIX A: Comparison of plan types.

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Greenonions •C R O P Y I E l D -

b A S E DF M V - AC R E Ag E lO S S

F R u I t l E A F Y R O Ot Ot h E R

Greenpeas •Kale •Leeks •Lettuce •Melons •Mesclun •Mustard greens •Onions, seed •Onions, set •Onions, Spanish • •Onions, yellow • •Peppers, banana • •Peppers, bell • •Peppers, specialty •Parsnips •Potatoes •Pumpkins •Radishes •Redbeets •Rutabagas • •Spinach •Squash •Sweet corn •Sweet potatoes •Tomatoes •Turnips •Watermelons •Yu choy •Zucchini •

The plan names may vary from the crop names above. Please see the Contract of Insurance for the precise plan names.

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What are my responsibilities?Important datesTo ensure that your PI contract remains in good standing, please note these important dates and deadlines in the annual cycle of your insurance contract:

D E S C R I P t I O N D At E ( Y I E l D - b A S E D ) F M V - A l

P OtAtO E S A N D O N I O N S

C A R R Ot S , P E P P E R S , A N D R u tA b Ag A S

A S PA R Ag u S

Cancellation April 1 April 1 Oct. 30 May 1

Apply for coverage April 1 May 1 Oct. 30 May 1

Make changes to coverage April 1 May 1 Oct. 30 May 1

Unseeded Acreage Benefit (USAB): Apply and Notify Agricorp of 10 per cent increase in acreage

April 1*

*onions only

April 1*

*carrots only

N/A N/A

File damage report for USAB and add new crops

Up to planting deadlines*

*onions only

Up to planting deadlines*

*carrots only

N/A N/A

Reportfinalplantedacreage to Agricorp

Within 10 days of planting or June 30, whichever comes first

Within 10 days of planting or June 30 whichever comes first

*except peppers-July 10

Oct. 30 SeeAcreageReportingDead-line table on page 25 for crop specific deadlines

Pay premium July 10 July 10 April 15 Within 10 days of receipt of invoice

Harvest N/A October 15 for peppers only

N/A RefertothePlantingDeadlines and Coverage Periods Production Insurance document included in your renewal or application package

Reportyield December 15 December 15 July 15 N/A

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good farm management practicesYou are expected to use good farm management practices at all times. If you use practices that contribute to a production loss, you may lose some or all of your insurance coverage.

Changes to your business structureIf you make changes to your business structure, including changes to name, address, or shareholders, you must report them to Agricorp by May 1 of the insurance year.

Reporting damageYou must report all crop damage as soon as it occurs. An Agricorp adjuster may visit your farm to inspect the damage for the purposes of your claim. Failing to report damage as soon as it occurs may cause your claim to be denied.

You must report to Agricorp in advance any significant changes in the scale of your operation or the farm management practices you use.

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SEC tION I I : Yield-based vegetable plans

What are the plan details?Insurable crops Thefollowingvegetablecropsareinsurableundertheyield-basedvegetableplans:• Asparagus • Carrots* • Seedonions• Bananapeppers** • Potatoes* • Setonions• Bellpeppers** • Rutabagas** • Spanishonions * Fresh production only is insured under the yield based vegetable plan. Processing production is insured under a separate PI plan. For more information, refer to the publication, Production Insurance, Plan Overview, Processing Vegetables.** Both fresh and processing production is insured under the yield

based vegetable plan.

Planting deadlinesIn order to maintain your PI coverage, you must plant your crops by the following deadlines:

C R O P P l A N t I N g D E A D l I N E

Asparagus N/A(perennialcrop)

Seed onions and set onions May 15

Spanish onions May 20

Bell peppers and banana peppers June 15

Potatoes – Shepody and Snowden varieties June 21

Potatoes – all other varieties June 30

Carrots and rutabagas June 30

For crops where both fresh and processing production is insured underthisplan,allacres of the crop must be insured. You cannot insure only fresh or only processing production.

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Insured perils Theyield-basedvegetableplanprovidescoverageagainsttheseinsuredperils:

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Asparagus • • • • • • • • • •Bell peppers

• • • • • • • • • • •

Banana peppers

• • • • • • • • • • •

Carrots • • • • • • • • • •Potatoes • • • • • • • • • •Rutabagas • • • • • • • • • •Seed onions

• • • • • • • • • •

Set onions • • • • • • • • • •Spanish onions

• • • • • • • • •

* Provided good farm management practices are followed

Coverage eligibility Aone-acreminimumisrequiredtoinsureyield-basedvegetablecrops,exceptforfreshmarketpotatoesandrutabagas,whichrequireaminimumofthreeacres.

AsparagusCoverage level options: 70, 75, 80, 85, 90 per cent.

Available coverageAsparagus is eligible for total production coverage.

Special conditionsWith asparagus, it is considered a good farm management practice to plant crowns rather than direct seed. Production insurance covers only asparagus plants that are at least four years of age (from crowns) or older.

Harvest duration will depend on the growing conditions in the year and the resilience of the crop. Your individual yield history is based on your historic harvest period. Typically, the harvest period is for six weeks. If your yield falls below your production guarantee due to immaturity or previous management decisions, Agricorp will adjust your production guarantee accordingly.

Coverageislimitedtothefieldanddoesnotincludepost-harvestdiseasesencountered during storage.

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Claim priceTheclaimpriceunitisindollarsperpound.Theclaimpriceisbasedonthefive-yearaverageprice of fresh sales as reported by the Ontario Ministry of Agriculture and Food (OMAF), less an amountperpoundfornon-incurredcosts(packoutandcontainers).

BananapepperCoverage level options: 70, 75 and 80 per cent.

Available coveragePeppers are eligible for total production coverage, the reseeding benefit and the pepper salvage benefit. For more details on the pepper salvage benefit, see the Pepper Salvage Benefit Production Insurance Document. Also see an explanation and example on page 22.

Claim price

The claim price unit is in dollars per ton. There are three claim price options. The claim price is basedontheOntarioProcessingVegetableGrowers(OPVG)contractpriceforbananapeppers,andgreen,multi-colouredandredbellpeppers.

Bellpepper

Coverage level options: 70, 75 and 80 per cent.

Available coverage

Peppers are eligible for total production coverage, the reseeding benefit and the pepper salvage benefit. For more details on the pepper salvage benefit, see the Pepper Salvage Benefit Production Insurance Document. Also see an explanation and example on page 22.

Claim price

The claim price unit is in dollars per ton. There are three claim price options. The claim price is basedontheOntarioProcessingVegetableGrowers(OPVG)contractpriceforbananapeppers,andgreen,multi-colouredandredbellpeppers.

Carrots

Coverage level options: 65, 70, 75 and 80 per cent.

Available coverage

Carrots are eligible for total production coverage, as well as the unseeded acreage benefit and the reseeding benefit.

Early-harvest yield factoringYour AFY for carrots is based on the harvested production of mature carrots. Factoring is designedtoadjustyouryieldtoaccountforcarrotsharvestedbeforematurity.Early-harvestcarrotsareassignedapotentialyieldthatisgreaterthanorequaltoyourguaranteedproduction. However, a lower potential yield may be applied if the Agricorp adjuster inspects the crop and believes the lower potential is due to damage incurred by an insured peril.

Claim priceThe claim price unit is in dollars per 50 pound bag. The claim price is based on a fall packer surveyandOMAFRA’sfive-yearaveragesurvey,lessnon-incurredcosts.

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PotatoesCoverage level options: 70, 75, 80, 85 and 90 per cent.

Available coveragePotatoes are eligible for total production coverage, as well as the reseeding benefit.

Early harvest yield factor for potatoesYour AFY for potatoes is based on the harvested production of mature potatoes. Factoring is designed to adjust your yield to account for potatoes harvested before maturity. The maturity date is the last day of the Ministerial exemption on imported processing new crop potatoes in bulk. Factors are applied as follows:

FAC tO R I N g P E R I O D S

l E N g t h O F FAC tO R I N g P E R I O D ( D AYS )

FAC tO R

Ministerial exemption date

1 1.0000

1st period 3 2.0474

2nd period 7 1.5176

3rd period 7 1.2056

Last date 1 1.0000

Example:If the Ministerial exemption date is July 10, potatoes harvested between July 11 and July 13 will be factored by 2.0474, July 14 to 20 harvests will be factored by 1.5176, and so forth.

Claim priceThe claim price unit is in dollars per hundredweight. There are two claim price options based onafive-yearaverageoffreshtablestockpotatoes,lessnon-incurredcosts(truckingandboardfees).

RutabagaCoverage level options: 70, 75 and 80 per cent.

Available coverageRutabagasareeligiblefortotalproductioncoverage,andthereseedingbenefit.

Claim priceThe claim price unit is dollars per ton. The claim price is based on the three year average industrypricelessnon-incurredcosts.

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SeedonionsCoverage level options: 70, 75 and 80 per cent.

Available coverageSeed onions are eligible for total production coverage, as well as the unseeded acreage benefit and the reseeding benefit.

Small onion conversionA yield conversion is calculated when the grower is only in a claim position and the amount of small onions is greater than the natural occurrence of small onions of the total yield. The natural occurrence of small onion bags is 5 per cent of total yield. If the natural occurrence is greater than the actual number of small onions, the actual number of onions harvested is the yield to count. If the natural occurrence is smaller than the actual number of small onions, a conversion isrequired.

Total yield to count = actual number of large onions + converted number of small onions

Where:converted number of small onions = natural occurrence of small onions + (actual number of small onions – natural occurrence of small onions) x 0.40

Claim priceThe claim price unit is dollars per 50 pound bag. The claim price is based on a fall packer survey andOMAF’sfive-yearaveragesurvey,lessnon-incurredcosts.

SetonionsCoverage level options: 70, 75 and 80 per cent.

Available coverageSet onions are eligible for total production coverage, as well as the unseeded acreage benefit and the reseeding benefit.

Claim priceThe claim price unit is dollars per 50 pound bag. The claim price is based on a fall packer survey andOMAF’sfive-yearaveragesurvey,lessnon-incurredcosts.

SpanishonionsCoverage level options: 70, 75 and 80 per cent.

Available coverageSpanish onions are eligible for total production coverage, as well as the unseeded acreage ben-efit and the reseeding benefit.

IrrigationisrequiredtoparticipateintheSpanishonionplan.

Claim priceThe claim price unit is dollars per 50 pound bag. There are two claim price options. The claim priceisbasedontheprocessorpricelessnon-incurredcosts.

This is not available for Spanishonionsbecausedrought is the main peril contributing to onions size and irrigation is required for eligibility.

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How is PI coverage determined?The following factors are used to determine how much damage you are protected against from insured perils: • Averagefarmyield• Coveragelevel• Guaranteedproduction

Average farm yield

Agricorp calculates an average farm yield (AFY) that is used as a benchmark to determine if your actual production is below your historical average for insurance purposes.

AFY for existing plan participants Your AFY is calculated using up to the past 10 years of your actual reported yields.

AFY for new plan participants If you are new to the PI plan, each crop is assigned an underwrittenfive-yearAFYthatisbasedon:• Soiltype• Drainage• Townshipaverages• Planaverages• Historicaldata• Managementexperienceandpractices

Each year that you participate in the plan, your actual yield replaces an underwritten yield until your AFY is composed entirely of your own actual yields.

Yield reporting An Agricorp adjuster will visit your farm after harvest to collect your actual yield information and/ormeasureyourstoredcropharvestedfromthefield.Informationonyoursalesmayalsobe audited to verify your yield.

Yield buffering Unusuallyhighandlowyieldsarebufferedtostabilizeandlessentheimpactofextremeyields on your AFY: • Theupper threshold is 130 per cent of your AFY. If your actual yield is above the upper threshold,theyieldisbufferedtwo-thirdsofthewaydown to the upper threshold.

• Thelower threshold is 70 per cent of your AFY. If your actual yield is below the lower threshold,theyieldisbufferedtwo-thirdsofthewayup to the lower threshold.

Coverage levelAt the time of application or renewal, you choose a coverage level from one of several options available for each crop that affects both the amount of premium you pay as well as any potential claims you may receive.

Ifyougrowasparagus, your initial underwritten average farm yield is also based on whether hybrids and/or open pollinatedvarietiesaregrown,theageofplantings,your marketableyieldhistory, and provincial and Agricorp aver-age yields.

Agricorp may adjust your AFY to reflect any substantial changes to your farm management practices or land base.

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These numbers are the result of the calculations that follow.

Guaranteed productionYour guaranteed production is determined by multiplying your AFY by your selected coverage level. If an insured peril causes your actual yield to fall below your guaranteed production, a production claim may be paid on the difference.

Evan Farm Example I: Calculating AFY for new customersEvan Farm is a seed onion producer that is applying for PI for the first time.Year 1:AgricorpassignsEvanFarmafive-yearbeginningAFYof900bagsperacre(whereonebag of onions weighs 50 pounds).Year 2: Evan Farm’s actual yield for Year 1 was 920 bags per acre. As a result, its AFY for Year 2 is now based on one actual yield plus four underwritten yields, as follows:

AFY (Year 2) = 920 + (4 x 900)

5= 4520

5= 904 bags/acre

Year 3: The actual yield for Year 2 was 700 bags per acre. The AFY for Year 3 is now based on two actual yields plus three underwritten yields, as follows:

AFY (Year 3) = 920 + 700 + (3 x 900)

5= 4320

5= 864 bags/acre

The AFY for following years is calculated in the same manner until all underwritten yields are replaced by actual yields starting in Year 6.

Evan Farm Example II: Yield bufferingAssume Evan Farm has now participated in the PI program for several years. • In2011,lessthanidealgrowingconditionsledtoaverylowyield.Thisextremelylowyieldis

buffered up for the purposes of calculating AFY. • In2014,idealgrowingconditionsledtoabumpercrop.Thisextremelyhighyieldisbuffered

down for the purposes of calculating AFY. The table below shows Evan Farm’s actual yields and the buffered yields for 2011 and 2014:

Y E A R AC t uA l Y I E l D ( b Ag S P E R AC R E )

b u F F E R E D Y I E l D( b Ag S P E R AC R E )

2008 920 920

2009 700 700

2010 1086 1086

2011 72 433.7

2012 936 936

2013 1056 1056

2014 1188 1156.94

2015 972 972

2016 880 880

2017 970 970

Average 878.00

2018 AFY 911.06

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Evan Farm’s upper and lower limit thresholds are calculated as follows:

Upper threshold = 130% x 878 bags/acre = 1141.40 bags/acre

Lowerthreshold = 70%x878bags/acre = 614.60 bags/acre

The buffered yield would be calculated as follows:

Difference between actual yield and the upper limit

= =

1188 - 1141.40 46.6

Bufferingadjustment(BA) = = =

Difference between upper limit and actual yield x 2/3 46.6 x 2/3 31.06 bags per acre

Bufferedyield-2014 = = =

Actualyield-BA1188 - 31.061156.94 bags per acre

Difference between lower limit and actual yield

= =

614.60 - 72542.60 bags per acre

Bufferingadjustment(BA) = = =

Difference between lower limit and actual yield x 2/3 542.6 x 2/3 361.70 bags per acre

Bufferedyield-2011 = = =

Actualyield+BA72 + 361.70433.70 bags per acre

This buffered yield is then used in calculating your average farm yield.

Evan Farm Example III: Determining guaranteed productionEvan Farm selects the highest coverage available for seed onions at 80 per cent. The guaranteed production(GP)peracreisdeterminedas:

gP = AFY x coverage level = 911.06 bags/acre x 80% = 728.85 bags/acre

If an insured peril causes Evan Farm to harvest fewer than 728.85 bags per acre in 2018, a production claim may be paid.

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How are PI premiums determined?Your annual premium calculation is based on: • Basepremiumrate• Discountorsurcharge• Finalreportedacreage

Basepremiumrate

Basepremiumratesaredeterminedannuallyatthetimeofrenewal.Ratesmaychangebased on factors like past performance of the plan, changes to claim price and the level of the ProductionInsuranceReserveFund.

Discounts and surchargesIf you have been enrolled in a PI plan for more than one year, your premium rate may be discounted or surcharged. Discounts and surcharges are determined by comparing your individual claim rate to the claim rate for the crop plan as a whole: • Ifyourindividualclaimrateisgreater than the claim rate for the crop plan, you may

have a surcharge applied to your premium.• Ifyourindividualclaimrateisless than the claim rate for the crop plan, you may have

a discount applied to your premium.

The claim rate measures the total dollar value of all claims paid, as a percentage of the total insured liability. Liability is the total guaranteed production value of the insured crop multiplied by the claim price, or the amount your PI would pay if you had a total crop loss. Your individual claim rate takes into account the total value of all the claims you have received and the total liability you have insured during your enrolment in the plan. The claim rate for the plan takes into account the value of all claims and the total liability insured over the years that the plan has been in existence.

C A lC u l At I N g D I S CO u N t O R S u R C h A R g E

Discount or

surcharge percentage = 100 x # of years enrolled in plan

x ( individual claim rate

– 1)

25 plan claim rate

Notes:• ThereisnodiscountorsurchargeforasparagusorFMV-AL.• Themaximumannualdiscountorsurchargeiscappedat+/-25percentofthebaseratepremium(excludingcauliflower,cabbage,

and broccoli, which have an unlimited annual discount or surcharge).

A premium discount or surcharge applies to yield-based vegetable plans.

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EvanFarmExampleIV:CalculatingdiscountorsurchargeAssume the plan claim rate is constant over the next 10 years. The individual accumulated liability increases given the AFY for each year over time. All growers start off with no discount or surcharge. Evan Farm does not have any claims the first three years of Production Insurance so it receives a discount every year. In the fourth year of production, Evan Farm has a claim of $146,720. In turn, this claim moves the farm from the previous year’s 8 per cent discount to a 9.71 per cent surcharge.

Y E A R Y E A R SO F

E N R O l .

C u S tO M E R ’S ACC u M u l At E D

l I A b I l I t Y

C u S tO M E R ’SACC u M u l At E D

C l A I M S

C u S tO M E R ’S C l A I M R At E

( % )

P l A N C l A I M R At E

( % )

C u S tO M E R ’S D I S CO u N t ( - )

O R S u R C h A R g E ( + )

2008 0 156,800 NIL 0.00 12.8 0.00

2009 1 315,040 NIL 0.00 12.8 -4.00

2010 2 471,920 NIL 0.00 12.8 -8.00

2011 3 633,640 146,720 23.16 12.8 9.71

2012 4 778,868 146,720 18.84 12.8 7.55

2013 5 923,936 146,720 15.88 12.8 4.81

2014 6 1,074,158 146,720 13.66 12.8 1.61

2015 7 1,231,010 146,720 11.92 12.8 -1.93

2016 8 1,387,576 146,720 10.57 12.8 -5.58

2017 9 1,543,656 146,720 9.50 12.8 -9.28

Over the past nine years, Evan Farm insured $1,543,656 in liability and received $146,720 in seed onion claims. As a result, the farm would receive a discount of 9.28 per cent.Since Evan Farm’s individual claim rate is less than the claim rate for the plan, it would receive a discount:

For calculating annual premiums, this percentage translatestoadiscountof0.9072(100%-9.28%=90.72%).

Discount or

surcharge percentage = 100 x 9

x ( 9.50%

– 1)

25 12.80%

= -9.28%A small claim may have little or no effect on your discount or surcharge. In a year when many other plan participants are also in a claim situation,evenalargeclaimmay have little impact on your discountorsurcharge,becausethe claim rate for the plan is also likely to increase.

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Cost sharing

Once you report your number of eligible acres, an invoice will be sent to you for your portion of the annual premium.• Thefederalandprovincialgovernmentscontribute

up to 60 per cent of the annual premium. • Yourannualpremiumdoesnotincludeanyfeesforadministrativecosts,whicharefunded

entirely by the provincial and federal governments.

EvanFarmExampleV:CalculatingannualpremiumForthecurrentcropyear,thebasepremiumrateat80percentcoverageis$272.76/acreforseedonions. Evan Farm reported 50 acres.As calculated in Example IV, Evan Farm has a premium discount of 9.28 per cent. The annual premium (AP) for Evan Farm is calculated as:

AP = number of acres x base premium rate x discount/surcharge = 50 x $272.76 x 0.9072 = $12,372.39

Final reported acreageYou must report your planted acres to Agricorp by the deadlines specified in What are my responsibilities on page 6.

What happens when a crop is damaged?Reporting damageYou must report damage as soon as it occurs by calling Agricorp at 1-888-247-4999, Monday to Friday, from 7 a.m. to 5 p.m. If you do not report damage immediately, your claim could be denied.

Claim eligibilityYou must meet the obligations outlined in the section What are my responsibilities? on page 6.

Specific eligibility criteria for different claim types are as follows:

1. Production ClaimsProduction claims cover reductions in yield caused by insured perils. Agricorp may pay a claim if: i. Damage was reported to Agricorp before harvest;ii. Yield loss was due to an insured peril; andiii. Your declared yield falls below your guaranteed value. A claim is paid if an insured peril causes your yield to fall below your guaranteed production.

The minimum annual customer premium is $100 per crop and $150 per crop for bell peppers and banana peppers.

Report your acres as accurately as possible. Any discrepancies in acreage at the time of a claim may result in a decreased payment.

To be eligible for a claim,youmust report damage to Agricorp before harvest so an adjuster can complete the required crop inspection.

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EvanFarmExampleVI:CalculatingaproductionclaimIn Example II, the guaranteed production for Evan Farm was calculated as 728.85 bags per acre. Based on 50 reported acres, their total guaranteed production is 36,442.50 bags.For the current crop year, excessive rainfall and disease resulted in an actual reported yield of 72 bags per acre, or a total harvested yield of 3,600 bags. The production shortfall (PS) is calculated as:

PS = total guaranteed production - actual reported yield =36,442.50-3,600 =32,842.50bags

Based on an example claim price for seed onions of $6.50 per bag, the claim payable (CP) is calculated as:

CP = production shortfall x claim price = 32,842.50bagsx$6.5perbag = $213,476.25

2. unseeded acreage benefit (carrots, seed onions, set onions, and Spanish onions only)The unseeded acreage benefit (USAB) provides compensation if an insured peril other than drought prevents you and a large number of other growers in the same area from planting or seeding all or part of your acreage. Claim payments are based on the dominant crop you grew in the previous year. If you grew the same number of acres of two different crops, a priority list is used to determine your dominant crop. ToqualifyforUSAB,youmustinsureallofyouracreageofcarrots,seedonions,setonions and/orSpanishonions.The amount of a USAB claim is determined by the following factors:

Claim price The claim price is a predetermined dollar amount per bushel or pound that Agricorp sets for each crop.

Average farm yield (AFY) AUSABclaimisbasedonone-thirdofyourAFYforthe current plan year.

Deductible Claims are subject to deductibles whether the unseeded land is tiled or untiled:• Thedeductiblefortiled land is the greater of one per cent

or three acres of land still unseeded.• Thedeductibleforuntiled land is the greater of three per

cent or six acres of land still unseeded.The deductible is removed from the number of unseeded acres to determine the number of eligible acres for the USAB.

Per acre charge Aone-dollarper-acrechargeisappliedtothenumber of unseeded acres, instead of an additional premium for this benefit.

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The USAB benefit is calculated as:

uSAb = [claim price x 1/3 AFY x (total unseeded acreage – deductible)] - [one dollar x total unseeded acreage]

ToqualifyforUSABforonions,youmustinsureallyour fresh market carrots, seed onions, set onions, and Spanish onions and apply for USAB before April 1, of the current crop year.

EvanFarmExampleVII: CalculatingaUSABclaimAfter excessive rainfall prevents planting until well past the May 15 deadline for seed onions, Evan Farm is only able to plant 40 of the 50 acres it intended. The unseeded acreage consists of tiled muck land. The table in Example II shows Evan Farm’s AFY for the current year is 911.06 bags per acre. The example claim price for seed onions is $6.50 per bag. Since there are 10acresofunseededtiledland,athree-acredeductibleis applied.The USAB claim is calculated as:

uSAb = (claim price x 1/3 AFY x # eligible acres) - (one dollar x total unseeded acres) = ($6.50 x 303.69 x 7) – ($1.00 x 10) = $13,817.90 - $10.00 = $13,807.90

3. Reseeding benefitA reseeding benefit is paid if you have to reseed some or all acres of your crop due to an insured peril.Themaximumbenefitisbasedonaper-acrebenefitratethatAgricorpsetsforeachcrop.The reseed benefit consists primarily of seed or transplants, tillage, and planting costs. For some crops, like onions, insecticide costs are included in the benefit up to a maximum amount. Agricorpsetscrop-specificmaximumvaluesforeachreseedorreplantactivity.

Reseed benefit = damaged acres x reseed value/acre* * If your actual receipts are less than the Agricorp maximum, the lower value is paid.

Toqualify,youmust:• ContactAgricorptoopenaclaimbeforeyoureseed,

AND • Onceauthorized,finishreseedingbytheplanting

deadline for your area. The minimum acreage eligible for reseeding or replanting is three adjoining acres for fresh market potatoes and rutabagas, and one adjoining acre for all other vegetables.

The deadline to apply forUSABisApril1. SeeWhat are my responsibilities? on page 6 for other important USABdeadlines.

If you are planning on in-creasinglastyear’s planted acres by 10 per centormore,you must contact Agricorp by April 1. If you do not report your increasedacreage,youcouldbedenied benefits on some or all of any unseeded acres.

Refer to the current year’sinformation sheet from your renewal package or agricorp.com for current reseeding benefit rates.

21


EvanFarmExampleVIII:CalculatingareseedingbenefitclaimEvanFarmreportsdamageonMay1forexcessmoistureandflooding.Direct-seededonionsattheflagleafstagearedamagedinlow-lyingareas.AnAgricorpadjustermeasuresatotaloffour acres damaged.Agricorp’s reseed values for seed onions are as follows:

R E P l A N t AC t I V I t Y R E S E E D VA lu E( $/ AC R E )

Tillage $28.00

Planting $98.00

Maximum seed cost $1,661.00

Herbicide/insecticide $75.00

total reseed value ($/acre)

$1,862.00

Evan Farm’s reseed values for seed onions are as follows:

R E P l A N t AC t I V I t Y R E S E E D VA lu E( $/ AC R E )

Tillage $28.00

Planting $98.00

Evan Farm actual seed cost

$1,200.00

Herbicide/insecticide $75.00

total reseed value ($/acre)

$1,401.00

Evan Farm’s seed invoices show seed expenses of $1,200 per acre for reseeding, which is less thanAgricorp’smaximum.Asaresult,thereseedingbenefit(RB)iscalculatedusingEvanFarm’svalues, as follows:

Rb = damaged acres x total reseed value/acre = 4 acres x $1,401/acre = $5,604

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4. Pepper salvage benefit (banana and bell peppers only)The salvage benefit compensates you for wages and related labour costs plus 30 per cent, up to a maximum of $435 per acre. The combined value of any salvage and production claims cannot exceed the total liability for the contract. The salvage benefit is calculated as:Salvage benefit = total labour cost + 30 per cent Toqualify,youmustmeetallofthefollowingconditions:i. Damage must have occurred to at least half of an

acre on or before August 1 for banana peppers and on or before August 15 for bell peppers;

ii. Fungicides must be applied in accordance with good farm management practices; and

iii. You must notify Agricorp as soon as the damage occurs. An Agricorp adjuster will inspect the crop to assess the severity of the damage, confirm the cause, and assess a potential yield.

Evan Farm Example IX: Calculating a pepper salvage benefit claim Evan Farm decides to plant 15 acres of bell peppers under contract with a processor. When a hailstorm on August 4 causes crop damage, the grower immediately contacts Agricorp to open a damage report.An Agricorp adjuster visits Evan Farm and agrees they are eligible for a salvage benefit on ten acres. The processor has given written permission to proceed with the salvage work. They employ 46 labourers at $14 per hour to remove the damaged peppers in 10 hours. The maximum allowable pepper salvage benefit is $435 x 10 acres = $4,350.The salvage benefit (SB) calculation for Evan Farm is:

Sb = total labour cost + 30 per cent = (46 x $14 x 10) + (.30 x46 x $14 x 10) = $8,372

Evan Farm would therefore receive the maximum allowable salvage benefit of $4,350.

If the crop is grown under contract with aprocessor,the processor must provide written permission before the salvage work begins.

23


SEC tION I I I : Fresh market vegetable acreage loss plan

What are the plan details?Insurable crops ThefollowingvegetablecropsareinsurableunderthesefourFMV-ALplans:

Coverage eligibility TobeeligiblefortheFMV-ALPIplan,allofthefollowingconditions must be met:i. You must have a minimum of two acres per crop

class and insure all acres of that crop;ii. You must insure all crops within the same crop

grouping (e.g. if you insure three acres of onions and grow two acres of carrots you must also insure the carrots);

iii. You must plant or seed the acreage by the planting deadlines specified in the current year’s information sheet from your renewal package or available at agricorp.com;

iv. If you plant the acreage before you apply for PI, your coverage must first be approved by Agricorp.

Organic production Organic carrots and cabbage can be insured separately. To be eligible for organic coverage, the land you grow the crop on must be certified for the current crop year, and you must provide a copy of the certification to Agricorp.

Failure to provide any requested production records can result in the loss of a claim.

A single crop in a crop grouping may be insured individually if the crop covers an area of ten acres or more. If you want to insure additional cropsinthesamegrouping,youmust insure all (not just some) of the other crops in that grouping.

You can insure organic crops as conventional. However,damage caused by perils that are controllable as defined in OMAFRA Publication 838 may be denied a claim.

Root vegetables Fruit vegetables leafy vegetables Other vegetables• Carrots• Celeriac• French shallots• Garlic• Greenonions• Leeks• Parsnips• Radishes• Redbeets• Rutabagas• Spanish onions• Sweet potatoes• Turnips• Yellow onions

• Cucumbers• Eggplant• Melons• Bell and specialty

peppers• Pumpkins• Squash• Tomatoes• Watermelon• Zucchini

• Bok choy• Broccoli• Brussels sprouts• Cauliflower• Celery• Chinese cabbage• Gailan• Kale• Lettuce• Mesclun• Mustard greens• Spinach• Summer cabbage• Winter cabbage• Yu choy

• Broad beans• Greenandwax

beans• Greenpeas• Sweet corn

24


Peril options UndertheFMV-ALplans,youcanchooseoneoffourperiloptions:1. Multi-peril coverage This peril option provides protection against these insured perils:• Drought* • Freeze • Snow• Excessiveheat • Frost • Tornado• Excessivemoisture • Hail • Wildlife‡

• Excessiverainfall • Insectinfestation**‡ • Highwinds• Flooding • Plantdiseases**†‡

* Except Spanish onions.‡ Fromwhichthereisnoadequatemeansofprotection.**Notinsuredperilsfordoublecroppedzucchini. †Notaninsuredperilforcropsgrownonre-usedplasticmulch.

2. Single-peril coverage for hail only

3. Single-peril coverage for frost only

4. Combined coverage for hail and frost

Coverage level options You choose from one of the following available cover-age levels to suit your individual risk management needs:

P E R I l O P t I O N AVA I l A b l E CO V E R Ag E l E V E l S

60% 70% 80% 85%

Multi-peril • • •Hail only • • • •Frost only • • • •Hail and Frost • • • •

Insurable value options For each crop, you choose one of three insurable value options that are expressed in dollars per acre. The insurable value is the basis of your premium and any abandonment claim you may receive.

Coverage period To be eligible for insurance, you must finish planting by the latest planting date specified by Agricorp. The coverage period varies by crop. For specific planting deadlines and coverage period dates, refer to the current year’s Planting Deadlines and Coverage Period sheet on agricorp.com.

For specific insurable option values and abandonment thresholdlevels,refertotheIntended Crop Planting Sheet contained in your renewal package or available by contacting Agricorp.

If you have insurable crops in two different plans (e.g. root and leafy) you can select different plan design options for each plan (e.g. multi-peril coverage for root vegetables and hail-only coverage for leafy vegetables).

25


Acreage Reporting Deadlines You must report your acreage within 10 days of planting or by the acreage reporting deadline below,whichevercomesfirst.AcreagereportingdeadlinesundertheFMV-ALplansfallononeof three dates, depending on the crop.

P l A N AC R E Ag E R E P O R t I N g D E A D l I N E

J u lY 15or completion of planting, whichever comes first

Au g u S t 15or completion of planting, whichever comes first

S E P t E M b E R 15or completion of planting, whichever comes first

Fruit All crops

Leafy Brussels sprouts, cauliflower(seeded),celery, kale, and cab-bage

Broccoli, cauliflower(transplanted), Chinese cabbage and lettuce

Mesclun, baby spinach, and spinach

Root All except radishes Radishes

Other All crops

Atrenewalorapplication,youarerequiredtocompletea farm diagram identifying fields and farms. When you report your acreage, please use this diagram to report your acreage by farm number and field number.

Acreage changes If loss or damage occurs to an insured crop, you cannot abandon, destroy, reseed, replant, harvest or use the acreage for another purpose without consent from Agricorp. You must take all reasonable steps to prevent further damage to the crop and other insured crops until Agricorp releases the acreage.

LeighAcresExampleI:ChoosinginsurablevaluesLeigh Acres grows carrots, yellow onions, and spinach. The insurable value options for these crops for the current plan year are as follows:

C At E g O RY C R O P C l A S S O P t I O N 1( $/ AC )

O P t I O N 2( $/ AC )

O P t I O N 3( $/ AC )

Rootvegetables Carrots (mineral soil) $1,300 $1,040 $780

Rootvegetables Yellow onions (mineral soil)

$2,000 $1,300 $1,200

Leafy vegetables Spinach $1,100 $880 $660

Leigh Acres chooses insured values of $1,040 for carrots, $2,000 for yellow onions, and $1,100 for spinach.

Report your acres as accurately as possible. Any discrepancies in acreage at the time of a claim may reduce your payment.

26


How is PI coverage determined?UndertheFMV-ALplans,yourcoverageisdeterminedbycalculatingthetotalinsurablevalue.

total insurable value = insured value by crop class x number of acres of crop class

To calculate the total insurable value for a crop, multiply the insured value you selected by the number of acres of that crop.

The total insurable values for each crop class (e.g. carrots, onions) within each plan (e.g. root vegetables) are added together to determine your total coverage for each plan.

LeighAcresExampleII:CalculatingtotalinsurablevalueRecallthatLeighAcresgrowscarrots,onions,andspinach.Basedontheinsurablevaluesfor each crop in Leigh Acres Example I, the total insurable values are as follows:

C At E g O RY C R O P C l A S S AC R E S ( A ) I N S u R A b l E VA lu E

( b )( $ P E R AC R E )

tOtA l I N S u R -A b l E VA lu E

( A x b )

Rootvegetables Carrots (mineral soil)

20 $1,040 $20,800

Rootvegetables Yellow onions (mineral soil)

15 $2,000 $30,000

total $50,800

Leafy vegetables Spinach 15 $1,100 $16,500

total $16,500

Criteria for high density vegetables

AgricorpoffershighdensitycoveragetoreflectthedifferencesinproductiontechniquesinOntariohorticulture.High-densitybroccoli,celery,peppers,SpanishOnionsandzucchinicanbeinsuredseparately.Toquality,theplantingdensityofcropsmustmeetorexceedthevaluesin the following table:

h I g h D E N S I t Y C R O P M I N I M u M N u M b E R O F P l A N t S / AC R E

Bell peppers and specialty peppers

17,000

Zucchini, on mulch and zucchini,transplantedon mulch

8,250

Broccoli, transplanted 25,000

Celery 36,000

Spanish onions 78,000

27


How are PI premiums determined?Your annual PI premium is determined as a percentage of the total insurable value. The percentage used is a base premium rate set by Agricorp.

Premium = total insurable value x base premium rate

Basepremiumrate

Base premium rates are determined annually at thetimeofrenewal.Ratesmaychangebasedon factors like past performance of the plan, changes to thresholdlevels,andtheleveloftheProductionInsuranceReserveFund.

Cost sharing

Once you report your eligible acres, an invoice will be sent to you for your portion of the annual premium.• Thefederalandprovincialgovernmentscontribute

up to 60 per cent of the annual premium. • Yourannualpremiumdoesnotincludeanyfeesfor

administrative costs, which are funded entirely by the provincial and federal governments.

LeighAcresExampleIII:CalculatingannualpremiumUndertherootvegetableplan,LeighAcresselectsamulti-periloptionwithan80percentcover-age level. The example base premium rate is 4.00 per cent.Undertheleafyvegetableplan,LeighAcresselectsahail-onlyoptionwithan85percentcover-age level. The example base premium rate is 0.96 per cent.Using the combined total insurable value of $50,800 for carrots and onions determined in ExampleII,theannualpremiumforrootvegetables(APRV)iscalculatedas:

APRV = total insurable value by crop x base premium rate = $50,800 x 4.00% = $2,032.00

Using the $16,500 total insurable value for spinach determined in Example II, the annual premium for leafy vegetables (APLV) is calculated as:

APlV = total insurable value by crop x base premium rate = $16,500 x 0.96% = $158.40

The total annual premium (TAP) is determined by adding together the annual premiums for each crop plan:

tAP = APRV + APlV = $2,032.00 + $158.40 = $2,190.40

Refer to your renewal notice or agricorp.com for base premium rates specific to the crop year.

The minimum annual premium is $100 per FMV-ALplan(i.e.$100 for leafy vegetables and $100 for root vegetables).

28


What happens when a crop is damaged?Reporting damageYou must report damage as soon as it occurs by calling Agricorp at 1-888-247-4999, Monday to Friday from 7 a.m. to 5 p.m. If you do not report damage immedi-ately, your claim could be denied.

Claim eligibilityYou are expected to follow the obligations outlined in the section What are my responsibilities? on page 6. If loss or damage occurs to an insured crop, you may not destroy, reseed, replant, harvest, or use the acreage for another purpose without consent from Agricorp. You must also take all reasonable steps to prevent further damage to the crop until Agricorp releases the acreage.In addition:• Theminimumacreageeligibleforaclaimisonecontinuousacreofacropclass.• Assessmentofdamageandyieldsamplingisbasedongradingstandardsasdeterminedby

Agricorp and outlined in the Grading Standards Sheet, available in your renewal package or by contacting Agricorp.

• Youmustkeepdetailedproductionrecordsincluding,butnotlimitedto,cropprotectionrecordsandinvoices,andsupplythemtoAgricorponrequest.

Types of claimsThere are three types of claims under the acreage loss crop plans:1. Special protection claim2. Emergency measures claim3. Abandonment claimThe cumulative amount of compensation paid for different types of claims for one acre cannot exceed the insurable value of that acre.

To be eligible for a claim,youmustreport damage as soon as it occurs. Each individual area of damage must be reported separately.

29


1. Special protection claim A special protection claim may apply when an insured peril causes one of the following situations:i. an inability to plant your intended crop by the planting deadline; orii. arequirementtoplantaftertheintendedplantingdeadlineareplacementcropthathas

different land preparation practices from the crop you originally intended to plant.Your claim takes into account the actual work done to prepare the damaged acreage (for unseeded or unplanted acreage), or to prepare, over and above good farm management practices, the damaged acres for seeding or planting of the replacement crop.Your claim is calculated by multiplying the cost of expenses incurred, to a maximum as deter-mined and calculated by Agricorp, by your chosen coverage level.

Special protection claim = # of acres x cost/acre x coverage level

To be eligible for a claim, either a large number of producers in a given region must experience the same problem, or an area must be affected by prolonged, abnormal weather. The claim covers only products used and work done before the final planting date of the replacement crop.Applying for a special protection claim on unplanted acreage ends the insurance coverage for the acreage concerned.

2. Emergency measures claim An emergency measures claim may apply when emergency work is done to reduce or eliminate crop losses caused by an insured peril. Your claim takes into account the cultural operations carried out and the inputs used to replant, reseed or save the crop, as calculated by Agricorp. To be eligible for a claim, any work must be undertaken to avoid or reduce yield losses. Agricorp must first authorizetheworkandyoumustcompleteallemergencyworkrequired.Worktodestroytheaffectedcrop(eitherbyherbicideormachinery)is eligible for compensation when it is deemed appropriate before reseeding.

3. Abandonment claim Abandonmentisauthorizedwhenyouryieldislowerthan the abandonment threshold established for each cropclass.Abandonmentmaybeauthorizedatanytimein the season as long as an Agricorp representative is able to appraise the damage in the field.Eachcropclasshasapre-determinedabandonmentthreshold, which is calculated as a unit or weight per acre.

If you apply for a special protection claim,youmaybe required to provide Agricorp with sales receipts and production records showing products used and work completed.

It is possible to receive multiple emergency measures claims on thesame acre throughout the season.However,themaximumamount payable for emergency work is 80 percent of the insurablevalue,forallchosencoverage levels.

Existing customers may obtain current abandonment thresholds from the Intended Crop Planting Sheet contained in your renewal package. New customers may obtain this information from the adjuster at the time of application or by con-tacting Agricorp.

30


An abandonment claim is calculated as:

Abandonment claim = insurable value x coverage level x damaged acres

Anynon-incurredexpenseswillbedeductedfromtheamountoftheclaim.Early season abandonment can occur when:• Thefinalplantingdatefortheoriginalcrophaspassedsoreseedingisnotpossible.• Thereisashortageofseedortransplants.• Thereisnomarketavailableforcropswithstaggeredplanting.

Abandonment threshold adjustmentThe abandonment threshold may be adjusted downward if your actual crop yield is close to the abandonment threshold due to lower planting density, low productivity caused by agronomic conditions, or if you fail to follow good farm management practices. The abandonment threshold cannot be adjusted upward.

losses due to progressive diseases (onions, rutabagas, summer and winter cabbage, winter squash, red beets and carrots only) If disease is identified before harvest and its progress in storage lowered the sample yield below the abandonment threshold, an abandonment claim may be paid if all of the following conditions are met:i. Youprovidenoticeoftheperiland/ordamagetoAgricorpbeforeharvestandanAgricorp

inspection before harvest confirms the presence of disease; ii. The damaged crop is stored separately from the rest of the harvested crop and other

damaged fields; iii. You have made reasonable efforts to mitigate the damage, including, but not limited to,

reasonable efforts to sell the damaged crop; and iv. YouattempttoselltheharvestedcropwithinonemonthofharvestORyouprovideproof

thatitwasimpossibletosellthecrop,inwhichcaseyouwillberequiredtodestroythecrop.

Crops with graded harvest (equivalency factors)Gradedharvestisonlyapplicabletoprocessingcauliflower,processingcelery,cucumbers,pep-pers, carrots and yellow onions, or crops for which a revised grading standard was approved by Agricorp.

Gradingstandardsprovidetheproduceindustrywithauniformlanguagefordescribingthequalityandconditionsofcommoditiesinthemarketplace.Agricorpusesgradingstandardstodetermineifacropisofacceptablequalityorinaclaimsituation.

Ifaninsuredperilreducedthequalityofthecrop,anequivalencyfactormaybeappliedtothesampleyield.TheequivalencyfactorisdeterminedbydividingthepriceyoureceivebythemarketpriceforGradeNo.1.Anequivalencyfactormayalsobeappliedtocropsforwhicharevised grading standard was approved by Agricorp.

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C R O P g R A D E

Processingcauliflower 1 and 2

Processing celery 1 and 2

Cucumbers 1 and 2

Bell and specialty peppers 1 and 2

Carrots 1 and jumbo

Eggplant 1, 2, 3 and 4

Tomatoes 1 and 2

Yellow onions 1 and boilers

Tocalculatetheequivalentyieldofthesecrops,thevolumeofvegetablesineachgradeisas-sessed separately. If the price obtained for lower grades is less than the price for the higher grade (grade 1), a conversion is applied to determine what the yield would have been at the higher grade.

Destruction of abandonable fields Destruction is mandatory before an abandonment claim is payable for crops with graded har-vest or crops for which a revised grading standard was approved when: i. The yield determined by Agricorp is lower than the abandonment threshold for the intended

crop grade, however the crop does meet the marketing standards for a secondary use but you are able to demonstrate

a) That there is no market for the crop or b) It is not practical to harvest the crop for a secondary market or c) The sample yield is lower than the abandonment threshold after Agricorp has applied an equivalencyfactor.

Windrow crops (excluding pumpkins and squash) Abandonmentmaybeauthorizedifdamageoccurswhilecropsareinawindrowaslongas:• Thewindrowingisrequiredformaturationornormaldryingofthecrop,and• Goodfarmmanagementpracticeshavebeenfollowed.Cropsthatdonotrequirewindrowing for maturation or drying are not insured if there is damage after they are harvested into a windrow for storage purposes.

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LeighAcresExampleIV:CalculatingaspecialprotectionclaimLeigh Acres calls in a damage report for excess rain before the yellow onion planting deadline. The adjuster determines that the damaged area is six acres where the onions were intended to be planted and that it is not possible to plant the crop before the deadline. There is no replacement crop.Leigh Acres is eligible for a claim based on the cost of standard procedures used to prepare the land for the intended crop of yellow onions, as follows:

I N P u t S CO S t P E R AC R E

Plowing $25.00

Light tilling $6.45

Fertilizer(actual/element)• Nitrogen@100%• Phosphorus@20%• Potassium@20%

$81.36

Fertilizerapplication $5.31

Committed,non-recoverableexpenses $12.19

total per acre $130.31

The special protection claim (SPC) is calculated as:

SPC = # of acres x cost/acre x coverage level = 6 acres x $130.31 x 80% = $625.4 9

LeighAcresExampleV:CalculatinganemergencymeasuresclaimLeigh Acres contacts Agricorp to report damage to its carrot crop caused by disease. Upon inspection the adjuster determines that all 20 acres have been damaged. Six and a half acres aretobereplantedwhiletheother13.5acresonlyrequireextrafungicide.Thedamageoccurswell before the June 30 planting deadline. The following inputs are used to calculate the claim:

I N P u t S CO S t P E R AC R E

13.5 acres Fungicide $47.00

6.5 acres Earthing-upvegetables $6.16

Light tilling $6.45

Fungicide $47.00

Labour@2hours $25.20

Seeds (mineral soil) $375.75

Precision seeding $19.44

6.5 acres @ $480.00

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Based on the information in the table, the emergency measures claim (EMC) is calculated as: EMC = # of acres x cost/acre = (13.5 acres x $47.00) + (6.5 acres x $480.00) = $634.5 + $3120.00 = $3754.50While all 20 acres may also still be eligible for an aban-donment claim, the total compensation per acre may not be greater than the insurable value Leigh Acres selected for that crop class.

LeighAcresExampleVI:Calculatinganabandonment claim Leigh Acres spinach has been hit by hail late in the season. Leigh Acres calls in a damage report. The adjuster goes out and measures 4.75 acres that have been damaged. After sampling the damaged spinach to make sure the remaining stand was in fact below the abandonmentthreshold of 1000 poundsperacre,theadjusterauthorizesanabandon-ment claim on all 4.75 acres. The remaining 750 pounds of good spinach on each acre may now be salvaged by Leigh Acres, if the grower determines it is economically worthwhile to do so. The abandonment claim (AC) is calculated as follows: AC = # of Acres x Insurable Value x Coverage level = 4.75 acres x $1,100 x 85% = $4441.25Note: Becauseitwaslateintheseason,LeighAcreshaddonealltherecommendedpracticessothatnon-incurredcosts were not deducted. If it had been two weeks earlier, Agricorp would have taken off one application of insecticide at$96.85/acre.

Refer to your renewal notice or agricorp.com for base premium rates specific to the crop year.

The minimum annual premium is $100 per FMV-ALplan(i.e.$100 for leafy vegetables and $100 for root vegetables).

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SEC tION IV: HowdoIresolveaPIdispute?

Agricorp has a dispute resolution process for PI disagreements:• Ifyoudisagreewithadecisionaboutyourfile,aclaimoryoureligibilityforProduction

Insurance, please call us at 1-888-247-4999. • Ifyourissueremainsunresolvedaftertalkingtous,youcanrequestthatAgricorpreviewyourissuefurther.Acustomerservicerepresentativewillreviewtherequiredstepswithyou.

• Forappealsonaclaim,youmustfileyourappealwiththeAgriculture,FoodandRuralAffairsAppeal Tribunal within one year from the day you submit your Proof of Loss form (or any equivalentformprovidedbyAgricorponwhichyouareaffirmingdetailsofaloss).

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APPENDIX A: Comparison of plan typesThefollowingtwoscenariosarepresentedtoillustratedifferencesbetweentheyield-basedvegetableplanandtheFMV-ALplan.Bothscenariosarebasedon100acresofyellowseedonion crop grown on mineral soil.

Scenario1A hailstorm damages 25 acres of the crop after the planting deadline. The damaged 25 acres are not harvested, resulting in an overall yield loss of 25 per cent.Undertheyield-basedvegetableplan,theyieldfromtheundamaged,harvestedacreswouldoffset the lost yield from the damaged acres. A claim may or may not be paid, depending on whethertheharvestedyieldisgreaterthantheguaranteedproduction(GP).In this scenario, lost yield from the damaged 25 acres resulted in an overall yield loss of 25percent,whichcausesthetotalactualyieldtobelessthantheguaranteedproduction(GP) for the crop. As a result, the grower would be eligible for a production claim.UndertheFMV-ALplan,anabandonmentclaimwouldbe paid on the damaged acres at the time the damage occurs, regardless of the yield from the undamaged acres. The grower may receive multiple claim payments onasingleacre.Thisplantypeprovidesspot-losspro-tection because the yield from the undamaged acreage does not offset the yield from the damaged acreage.

Scenario2Drought affects the entire acreage, resulting in a 25 per cent overall yield loss. In this case, thegrower’syieldisbelowhisGPsohewouldbeeligibleforaclaimundertheyield-basedvegetable plan. UndertheFMV-ALplan,thesampleyieldisnotbelowthe abandonment threshold on any acre, so the grower would not be eligible for an abandonment claim. If the growerhadselectedFMV-ALhail-onlycoverageinthisscenario, he would also be ineligible for a claim, since drought caused the loss rather than hail.

SummaryWhilebothscenariosarebasedona25percentyieldloss,Scenario1isaspot-losssituation,whileScenario2isanoverallyieldlossacrossallacres.Ingeneral,theyield-basedvegetableplanismoreeffectivewhereyieldand/orqualitylossisminoroveralltheacresandwhere damagerarelypreventsthecropfrombeingharvested.Underspot-lossconditions,theFMV-ALplan pays a higher claim.

SeeTable1.0on page 36 for example claim calculations for bothplantypes,when damage is restricted to a specific area.

SeeTable2.0on page 37 for example claim calculations for bothplantypes,when damage is wide spread across all areas.

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table 1.0 Example of when damage is restricted to a specific area

Y I E l D - b A S E D V E g E tA b l E P l A N F R E S h M A R k E t V E g E tA b l E - AC R E Ag E lO S S ( F M V - A l ) P l A N

M u lt I -P E R I l

M u lt I -P E R I l

h A I l O N lY

Claim price (per 50 lb bag)

A $6.50 Insurable value A $2,000 $2,000

AFY (50lbbags/acre)

B 911.06 AFY B N/A N/A

Coverage level C 80% Coverage level C 80% 85%

GP*(50lbbags/acre)

D = B x C 728.85 Abandonment threshold (50 lb bags)

D 320 320

Acres E 100 Acres E 100 100

TotalGP(50lb bags)

F = D x E 72,885 Damaged acreage

F 25 25

Total harvested yield

G 68,329.50 Sampled yield of damaged acreage

G 0 0

Shortfall(50 lb bags)

H=F-G 4,555.50 Shortfall (sample yield is less than abandonment threshold)

H Yes Yes

Claim I = A x H $29,610.75 Claim If H = yes, then I = A x C x F

$40,000 $42,500

Maximum claim J = A x F $473,752.50 Maximum claim J = A x C x E $160,000 $170,000

Premium amount (% total insur-able value)

K 4.00% 0.69%

Premium/acre K 272.76 Premium/acre L = A x K $80.00 $13.80

Total premium M = E x K $27,276 Total premium M = E x L $8,000 $1,380

Premium as % of maximum claim

N = (M ÷ J) x 100 5.76% Premium as % of maximum claim

N = (M ÷ J) x 100 5.0% 0.81%

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table 2.0 Example of when damage is wide spread across all areas

AV E R Ag E FA R M Y I E l D ( A F Y ) P l A N F R E S h M A R k E t V E g E tA b l E - AC R E Ag E lO S S ( F M V - A l ) P l A N

M u lt I -P E R I l

M u lt I -P E R I l

h A I l O N lY

Claim price (per 50 lb bag)

A $6.50 Insurable value A $2,000 $2,000

AFY (50lbbags/acre)

B 911.06 AFY B N/A N/A

Coverage level C 80% Coverage level C 80% 85%

GP*(50lbbags/acre)

D = B x C 728.85 Abandonment threshold (50 lb bags)

D 320 320

Acres E 100 Acres E 100 100

TotalGP(50lb bags)

F = D x E 72,885 Damaged acreage

F 100 N/A

Total harvested yield

G 68,329.50 Sampled yield of damaged acreage

G 588 N/A

Shortfall(50 lb bags)

H=F-G 4,555.50 Shortfall (sample yield is less than abandonment threshold)

H No N/A

Claim I = A x H $29,610.75 Claim If H = yes, then I = A x C x F

$0.00 N/A

Maximum claim J = A x F $473,752.50 Maximum claim J = A x C x E $160,000 $170,000

Premium amount (% total insur-able value)

K 4.00% 0.69%

Premium/acre K 272.76 Premium/acre L = A x K $80.00 $13.80

Total premium M = E x K $27,276 Total premium M = E x L $8,000 $1,380

Premium as % of maximum claim

N = (M ÷ J) x 100 5.76% Premium as % of maximum claim

N = (M ÷ J) x 100 5.0% 0.81%

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2018-03-15

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