To understand how much extreme weather is costing the country in money agriculture look at the government of Saskatchewan’s financial records.
Saskatchewan had expected to have more than $1 billion extra for the year ending March 31, 2024, but now they actually have about $482 million less instead.
This big change is mostly because of drought and the resulting increase in government payments for crop insurance.
This is just one example of what experts say Canadians will see more of as climate change puts pressure on farming. Taxpayer money already supports the agriculture industry with billions of dollars each year, and some people think the bill will get higher as natural disasters from climate change make it harder for farmers to make a living. climate change puts pressure on farming. Taxpayer money already supports the agriculture industry with billions of dollars each year, and some people think the bill will get higher as natural disasters from climate change make it harder for farmers to make a living.
“We will see more droughts, more pests, and lower yields,” said Guillaume Lhermie, director of the Simpson Centre for Food and Agricultural Policy at the University of Calgary.
“The question for me is, who should pay for that? I think the government will be asked for money more and more.”
In Canada, farmers in all provinces can get crop insurance to help with losses from natural dangers like drought, flood, heat, and snow.
This is one of many business risk management programs, and they are all paid for by both the federal and provincial governments through the Sustainable Canadian Agricultural Partnership.
But in recent years, extreme weather like droughts, wildfires, heat waves, and floods has been a big problem for farmers across the country.
In Saskatchewan, last year's drought hurt crop production, leading to a decrease of almost 11 percent from the previous year, and forcing the government to spend about $1.2 billion more than planned through its Ministry of Agriculture.
This year, the provincial Finance Minister Donna Harpauer said that because of hard weather and soil conditions, Saskatchewan plans to spend $431.7 million this year – a 5.8 percent increase from last year – to make sure crop insurance and other farm risk programs are fully funded.
This is not the first time drought has caused financial problems for the province. In 2021, Saskatchewan farmers had one of the biggest production drops in the province’s history (47 percent decrease from the previous year) because of extreme heat and drought. The Saskatchewan Crop Insurance Program gave a record $2.6 billion to farmers that year to help with their losses.
Other provinces have also had big crop insurance payments.
In Alberta, the Agriculture Financial Services Corp. paid out $2.1 billion in 2021 and $552 million in 2022, with drought as the main reason for most of those claims.
The AFSC has cautioned that Alberta farmers may see higher crop insurance premiums for the 2024 crop year, mainly because the program had financial losses in 2021 and 2022.
In addition to crop insurance, Canada also has a federal-provincial-territorial disaster relief framework that can be activated when farmers face “extraordinary costs,” such as the extra feed costs ranchers in Western Canada have had to pay due to drought drying up their pasture lands.
From the period ending Dec. 31, 2023, over $1.4 billion was given to Canadian producers as disaster relief under the AgriRecovery framework.
Keith Currie, president of the Canadian Federation of Agriculture, stated that while the disaster relief funding is appreciated, severe weather events are becoming so common that the entire system may need to be reassessed. AgriRecovery, for example, has been criticized for being too slow to respond after a disaster, with farmers often waiting months or even a year to receive funding.
“When we look at events like the ‘atmospheric river’ in B.C., the hurricane impacts in Atlantic Canada, or even the smoke damage from wildfires and how that’s affected crops, we need better risk management programs to help farmers have some assurance that they can survive these climate change impacts,” Currie said.
While crop insurance will always be necessary, Shannon Sereda, director of government relations for the industry group Alberta Grains, mentioned that governments can reduce the financial impact of extreme weather by increasing investment in agricultural research.
“One of the best defenses we have against climate change or extreme weather events is really investment in research,” Sereda said, adding that science can decrease climate-related crop failure through innovations such as the development of drought-resistant seed varieties.
Stewart Oke, who farms in central Alberta east of the city of Red Deer, said he “couldn’t operate” without crop insurance to protect him from unexpected losses.
However, while he acknowledged that the program is costly for both producers and governments, he said he believes it is sustainable as long as investments in research and technology keep pace.
“With access to innovation, there’s a lot of things that we can do as producers that will help keep our risk at a controllable level,” Oke said.
Lhermie, the University of Calgary professor, said in the short-term, climate change means governments will have no choice but to put more money into the agriculture industry to help it withstand extreme weather events.
In the longer-term, he suggested governments may want to consider making financial support for farmers conditional on certain environmental practices, such as soil health and biodiversity management.
“You could technically say that if you want to be insured then you have to be a good steward of the land. That’s something that could be doable, in the future,” Lhermie said.
“In Western countries, when these agricultural disasters occur, governments intervene a lot by providing subsidies and covering the losses. However, in the long term, this is not sustainable for government spending as it is costly.”