The Agricultural Producers Association of Saskatchewan (APAS) and the Saskatchewan government have been exchanging public words over how the province characterized the role of crop insurance payments in its recent mid-year budget update.
APAS says that many producers are worried about being considered a burden on the province's finances.
On Monday, the government projected a $2.7 billion deficit in its mid-year update. Finance Minister Donna Harpauer said the shortfall is mainly because of an expected $2.4 billion in crop insurance claims.
"If you backed out the expense of crop insurance — that $2.4 billion — as well as the livestock producer support, we would almost be balanced," Harpauer said during a news conference Monday.
"That's how significant that support was for agriculture producers."
APAS took exception to the implication that crop insurance payments are causing the provincial deficit.
"In 2020, Saskatchewan Crop Insurance Corporation reported a $2.4-billion surplus accumulated over previous years, plus a sizeable surplus in the reinsurance fund," APAS vice president Ian Boxall was quoted as saying in a news release Wednesday. "It's not fair to blame producers for a provincial deficit in a drought year when that surplus gets used up."
The province responded with its own news release later Wednesday, in the form of an open letter to APAS president Todd Lewis, signed by Agriculture Minister David Marit and Finance Minister Donna Harpauer.
"I will begin by pointing out that we disagree with the premise of the entire document," the government response said. "To suggest that the provincial government is somehow blaming our agricultural producers for the financial deficit reported in the financial update presented earlier this week is not only false, it is offensive."
The province's letter said Boxall's comments suggest he is unfamiliar with the concept of summary financial reporting. It asked APAS to retract its statement.
"It is disappointing, to say the least, that an organization such as APAS would, through either ignorance or deceit, willingly misinform its members with such callous disregard," the province said.
APAS president Lewis then put out another news release Thursday responding to the province's Wednesday release.
"Although it may not have been the intention of the government to leave that perception, many media reports made that link," Lewis wrote.
"Pointing out that producers are not responsible for a deficit situation when previous year's results are taken into account is our organization's job."
Lewis wrote that he had personally received calls from concerned producers, as had APAS's office and other representatives.
"Producers are concerned that the general public has a perception that farmers are receiving a 'break' or a 'bailout' when they receive a crop insurance cheque," Lewis wrote.
A general lack of understanding of the accounting principles behind crop insurance is the main issue at hand, according to Lewis.
"I stand to be corrected on the operational side of the finance ministry and the use of summary financial statements.," Lewis wrote. "However, having these discussions without being accused of being deceitful, ignorant, or misinformed would be appreciated."
In an interview, Lewis said the purpose of Thursday's letter was to convey that APAS meant no offence to anybody with its initial release.
He said it was meant to let members of the public know that farmers aren't being bailed out by the government, but rather there is a partnership between the government and producers where they pay for coverage, but only receive payment when they are in a claim position. He said it's like any other insurance program and in some cases producers have paid premiums for decades but never made a claim.
"We wanted to let the public know and ensure that there's no misconceptions around the funding of crop insurance and tying it to the deficit," he said.
Premier Scott Moe said that when insurance money is given to the agricultural industry, it has to be recorded as a financial expense, an accounting principle he said all provinces and the federal government follow.
"I think all of the letters in this case really could have been avoided had a couple of phone calls ultimately been made," he said.
