By Mark Reusser, Director, Ontario Federation of Agriculture

Insurance is important in any situation, but it is a particularly high priority for farmers. From hail and damaging winds to flooding and frost, field crops, orchards and vines face threats from weather extremes. Heavy snow loads and fires pose risk to livestock barns and other farm facilities – and theft is a growing concern in rural areas, leaving farm equipment and other items increasingly vulnerable.

It’s no surprise, then, that farmer members of the Ontario Federation of Agriculture (OFA) identified insurance as number two on the list of issues they’re most worried about in relation to their businesses in OFA’s 2024 Farm Business Confidence Survey. That’s up from fifth spot only a year before.

The nature of farming means that farmers and farm businesses have special insurance requirements that aren’t necessarily covered by conventional solutions. Farmers often use a combination of private and government-backed insurance programs to reduce risk on the farm.

This includes production insurance to protect against yield reductions or crop losses; farm property insurance covering buildings, equipment, livestock and stored product; or liability insurance to protect against injuries or damage from third parties.

There is also insurance for business interruption, cybersecurity, workplace safety for employees, and vehicles, as well as insurance programs such as AgriStability and AgriRecovery to help with income support or disaster relief when margins fall or unexpected events happen that aren’t covered elsewhere.

The availability of accessible and affordable insurance options is an ongoing challenge for farmers – one that dates to just after World War II.

I’m a director on the OFA’s board, and I’ve also just been newly elected as a director on the board of Co-operators, an insurance company that is also an OFA benefit program partner.

The history of these two organizations dates to the 1940s, when it was difficult for farmers to get affordable insurance for farming activities like transporting livestock. In 1946, farmers decided to form their own insurance company, called the Co-operators Fidelity and Guarantee Association. The OFA became a partner in the venture a year later.

In 1950, the Co-operators Insurance Association was created with principal shareholders OFA, the Ontario Credit Union League and the United Co-operatives of Ontario, and Co-operators as we know it today came into being in 1978.

Their offering of farm business insurance has grown over the decades to include other insurance and financial services. For example, OFA and Co-operators have worked together to design a family health, medical, dental and life insurance program for farm families who can’t access employer benefits the way many of their fellow Ontarians can.

As an insurance co-operative, Co-operators is owned and democratically controlled by the people who use its services under a one member, one vote model. Their lineup of products and services isn’t just focused on the farming community, and agriculture is a unique industry.

One of the OFA’s biggest assets is our ability to advocate for the needs of our members across Ontario and ensure that farmers are represented where decisions are being made. Not everyone understands the needs of agriculture the way farmers do, and I’m proud to be that voice for Ontario’s farmers on The Co-operators’ board.

The close working relationship between our two organizations is an incredibly important asset for OFA, giving us access to knowledge and resources related to farm insurance and the ability to provide direct input when programs and services just aren’t meeting our members needs.

It means we can help our members understand their insurance coverage and options, from general issues, like how basic farm insurance works to much more complex issues like insurability.

Our relationship also helps us advocate for new and improved programming, like for agri-tourism activities that bring the public onto farms and better solutions for new truck drivers who need to obtain driving experience.

We also regularly co-host webinars together for our members on issues like fire prevention or storm damage, such as after the derecho that swept through parts of Ontario in 2022, for example.

For farmers, insurance is one of the tools necessary for us to function in today’s world. It’s very difficult or even impossible to run a business without it.

Our members continue to share concerns about the affordability of farm insurance and are experiencing a surge in premiums due to a combination of factors: escalating values of farm assets like equipment, buildings, and technology; the increasing frequency and severity of extreme weather events such as storms and wildfires; and rising costs associated with rebuilding and repairs.

These elements collectively heighten the financial risk for insurers, leading to higher premiums for farmers, and is something the OFA will continue to focus on addressing.

 

For more information, contact:

Tyler Brooks
Director of Communications and Stakeholder Relations
Ontario Federation of Agriculture
519-994-2578
comms@ofa.on.ca