expected grazing period and the number of animal unitson pasture). In <strong>2011</strong>, 48 producers enrolled in the pilotprogram, with roughly 13,650 head of livestock (61,300acres of pasture) being covered for a total liability of$1.6 million.Insurance is available for the establishment of eligibleforage crops. Spot-loss compensation is provided when acrop fails to establish in the year of seeding due to naturalperils.Vegetable Acreage Loss Insurance provides commercialvegetable producers with protection against crop losses thatare severe enough to warrant working down all or part ofthe crop.Commercial strawberry and saskatoon growers are able toprotect themselves against losses during the establishmentperiod. Growers are eligible for compensation when plantlosses exceed 20% of the total stand.The Overwinter Bee Mortality Insurance Program, whichwas introduced in <strong>2011</strong>/<strong>12</strong>, enables commercial beekeepersto insure their honeybee colonies against unmanageableoverwinter losses. In <strong>2011</strong>, 44 beekeepers with 29,200colonies enrolled for a total liability of $3.1 million.For insurance purposes, MASC divides the Province of<strong>Manitoba</strong> into 15 areas of similar crop protection risk.These ‘risk areas’ form the geographic basis for determininginsurance coverages (liabilities) and premiums formost crops. The probable yield methodologies used todetermine coverages are individualized, and dependingon the crop, are based either on a producer’s relative yieldhistory (compared to the area average), or the producer’sindividual yield history.<strong>2011</strong> Crop YearThe <strong>2011</strong>/<strong>12</strong> growing season presented <strong>Manitoba</strong>’sproducers with considerable challenges including floodingfrom rivers and lakes, excess moisture, and even droughtconditions. Many fields entered the spring already saturatedby heavy rains during the previous fall. Over eight inchesof rain fell across much of <strong>Manitoba</strong> from August toNovember of 2010. Higher than normal rainfall andcooler than normal temperatures occurred in the springof <strong>2011</strong>, resulting in late seeding or no seeding in manycases. Waterlogged fields resulted in a record 2.9 millioninsured acres not being seeded. The areas surroundingLake <strong>Manitoba</strong>, the Parkland and the Southwest were thehardest hit.Weather conditions changed drastically in late June, withhot dry conditions continuing through September. Duringthis time, very few severe thunderstorms were experienced,with hail damage being substantially below average. Headinginto winter, the dry conditions continued with below normalamounts of precipitation from October to December.Poor early season growing conditions delayed seedemergence and plant development, resulting in delayedharvesting for some crops. Harvesting conditions weregenerally favorable, with the first killing frost occurring inmid-September. For most crops, provincial average yieldswere below average for <strong>2011</strong>. The exceptions were the heatlovingcrops (corn, dry edible beans and sunflowers), forwhich yields were above average.Figure 1 shows the major causes of loss for all crops in<strong>2011</strong>/<strong>12</strong>, compared to the historical average. In <strong>2011</strong>/<strong>12</strong>,excess moisture and drought/heat accounted for 73% and25% of the losses, respectively.For most AgriInsurance programs, premiums are paid 40%by insured producers, 36% by the Government of Canadaand 24% by the <strong>Manitoba</strong> Government. The exceptionis the EMI Zero Deductible Option premium, which ispaid entirely by participating producers. Administrativeexpenses for the AgriInsurance Program are shared 60% byCanada and 40% by <strong>Manitoba</strong>.14<strong>Manitoba</strong> <strong>Agricultural</strong> SeRVICes <strong>Corporation</strong>
Figure 1 – AgriInsurance Causes of LossCauses of Loss <strong>2011</strong>/<strong>12</strong>Figure 2 – AgriInsurance Premiums and Indemnities($ millions)Historical Causes of Loss (1966 to 2010)Excess Moisture (73%)Drought & Heat (25%)Hail (1%)Other (1%)350.0300.0250.0200.0150.0100.050.002007/08 2008/09 2009/10 2010/11 <strong>2011</strong>/<strong>12</strong>Excess Moisture (39%)Drought & Heat (35%)Frost (10%)Hail (7%)Disease (2%)Wind (1%)Other (6%)In summary, a total of 9.6 million acres were protected byAgriInsurance in <strong>2011</strong>/<strong>12</strong>, with 6.7 million seeded acresand 2.9 million unseeded acres (due to excess moisture).Total premiums were $168.8 million on $1.72 billion ofcoverage (liability). Indemnity payments for the yeartotalled $326.9 million, of which $162 million was paidout for Excess Moisture Insurance claims. Figure 2 showshow <strong>2011</strong>/<strong>12</strong> premiums and indemnities compare to theprevious four years. After accounting for interest revenueof $2.4 million, reinsurance premiums of $40.1 millionand prior year premium adjustments of $0.5 million,AgriInsurance had a net loss of $196.3 million for<strong>2011</strong>/<strong>12</strong>. The net loss resulted in the AgriInsurance reservedecreasing from $271.7 million to $75.4 million.PremiumsIndemnitiesLarge fluctuations in reserve levels are normal inAgriInsurance. When the surplus is high, a negative surplusload reduces premium rates and when the surplus is low, apositive surplus load increases premium rates. Normally,the reserve plus premium income and the additionalprotection provided by the purchase of private reinsurance,is sufficient to deal with the expected loss for the year. Withback-to-back losses in 2010/11 and <strong>2011</strong>/<strong>12</strong>, the federalprovincialreinsurance program may be required to providedeficit financing should another loss be experienced in20<strong>12</strong>/13.The AgriInsurance loss ratio (loss as a percentage of totalpremium) was 194% for <strong>2011</strong>/<strong>12</strong>. Loss ratios for individualcrops are listed in Table 1.<strong>2011</strong>/<strong>12</strong> Annual Report 15