Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West
Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 Stone Road West
Guelph, (Ontario) N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: AFRAAT@ontario.ca
Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email: AFRAAT@ontario.ca
AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL
APPEAL:
Ash v Crop Insurance Commission of Ontario
Ash v CICO 1997 ONAFRAAT 8
STATUTE:
Crop Insurance Act
HEARING:
March 27, 1997
DATE OF DECISION:
April 8, 1997
1997-08
NEUTRAL CITATION:
1997 ONAFRAAT 8
Ash v Crop Insurance Commission of Ontario
IN THE MATTER OF: Ontario Regulation 140/96 under the Crop Insurance Act (Ontario) R.S.O. 1990, c. C.46.
AND IN THE MATTER OF: An Appeal to the Crop Insurance Appeal Board by Michael J. Ash from the decision of the Crop Insurance Commission of Ontario, denying him a production claim under Regulation 256 of the Crop Insurance Plans - General.
Before: Ed Mailloux, Vice-Chair; Doug Flook, Member.
Appearances: Michael and Joanne Ash, appellants in person.
Peter Ilnyckyj and John Lanthier, on behalf of Agricorp.
DECISION OF THE BOARD
This appeal was heard in Simcoe, Ontario on March 27, 1997.
Mr. Ash appealed the decision of the Crop Insurance Commission of Ontario (Agricorp),
denying him a production claim under Regulation 256, Crop Insurance Plans - General.
Facts Not In Dispute
Michael J. Ash farms in Bayham Township, Elgin County. On March 18, 1996, Michael J. Ash purchased his first crop insurance policy from Agricorp. He insured 23 acres of corn for an insurance guarantee per acre of 2,346 bushels or 102 bu./acre.
The Corn Yield Report, dated December 30, 1996, records an actual yield of 469 bushels or 20 bu./acre. Thus there was a shortfall of 1,877 bushels. The price option was $3.71/bu. for a potential production claim of $6,963.67.
Agricorp denied this claim because of failure to report damage before harvest. In making their decision they relied on Regulation 256, Form 1, Section 8(3) of the Crop Insurance Plans - General which states:
"where loss or damage to the insured crop occurs and it appears, or ought reasonably to
appear, to the insured person at any time after planting and before the completion of
harvesting of the insured crop that production of the insured crop may thereby be
reduced, the insured person shall, as soon as the loss or damage is apparent, notify the
Commission in writing forthwith".
The Issue
Did Mr. Ash notify Agricorp of a potential production claim before the completion of harvest?
The Evidence
Mrs. Joanne Ash, wife of Michael Ash, stated that this is the first crop of corn they have grown and that they believe they did everything they could to ensure a good crop of corn. She said they had soil samples taken and put on the recommended fertilizer. Mr. Ash said they hired a custom operator to apply the fertilizer, pesticides and herbicides. He said that he cultivated the land but some spots were very wet.
Mr. John Lanthier, District Co-ordinator for Agricorp, stated that his first contact with Mr. & Mrs. Ash was in the spring of 1996 when he signed them up for crop insurance on 23 acres of corn. As part of signing up a new client, Mr. Lanthier said he would have evaluated the farm that they were on, asked questions about the type of farming they had done and given an underwriting value in order to provide an insurance policy. He said he would then have explained how farm yields are done and stressed how the final acreage report is received and how reseeding claims are filed. He said he also would have stressed that they must call him to report damage as soon as it occurs or it could jeopardize a claim. Mr. Lanthier said he left them with a copy of the 1996 Crop Plans Booklet.
Mrs. Ash said that they felt Mr. Lanthier explained their coverage in detail when they purchased the policy in the spring. In response to a question of the Board, Mr. Ash said they were told that if they were in a claim situation they should call and notify Agricorp.
Mrs. Ash said she called the District Co-ordinator, John Lanthier on June 20, 1996 to say that some of the crop needed to be reseeded due to excessive moisture. She said that she does not have a record of the phone call as it was placed using the 1-800 number. She said that Mr. Lanthier is a hard person to get a hold of. The Ash's testified that they reseeded four acres and that other parts of the field were too wet to reseed. They stated that they were told by Agricorp staff that an application for reseeding benefits would be mailed to them but they did not receive an application.
Mr. Peter Ilnycki, spokesperson for Agricorp, presented into evidence a record of the Ash's phone call to John Lanthier on June 28, 1996. The phone call initiated a Damage Report which states: "some of corn crop damaged by excess moisture - wants to replant today".
Mr. Lanthier testified that in 1996 there were several reseeding claims coming into his office. He said it is the responsibility of the farmer to report damage. Once damage is reported, Agricorp's policy is to give approval to reseed. He said that last year Agricorp did a general audit to see that reseeding was done. He stated that Agricorp did not audit the Ash's. He said that a client receives a "reseeding application" with their final acreage report.
The Ash's said that when they called Mr. Lanthier in June he was very busy. They stated they felt that if Mr. Lanthier had come to see the crop at the time of reseeding that he would have seen the damage.
Mrs. Ash said they didn't call Agricorp at harvest time as they were already behind schedule fulfilling the contract they had with the Co-op. She said their corn was not harvested until December 20, 1996 as they had to wait for the land to freeze before they could harvest the crop as the land was so wet. She also stated that they did not realize they would be in a claim situation until harvesting was completed.
Mr. and Mrs. Ash stated that when John Lanthier came to see the field on January 9, 1997, it was a miserable day and that he only saw the outside few rows. In their opinion, if he had walked to the middle of the field he would have seen the water damage and big wipeouts. Mr. Ash stated that their land is not tile drained.
Michael Ash said that they were under the assumption that everybody was honest. He said he wasn't aware of how important it was to call Agricorp before harvest. Mr. Ash said they had other area farmers look at their corn crop and they agreed there was nothing else they could have done other than tile the field.
Mr. Lanthier said that every call to his office is recorded and the only call he has a record of was placed by the Ash's on June 28, 1996. He said that the next contact his office had with the Ash's was when the yield evaluator went to their farm December 30, 1996 to complete the Corn Yield Report. The Yield Report indicated a yield of 469 bushels or 20 bushels per acre.
Mr. Ilnycki said that Agricorp needs to be notified of insured perils or damaged crops before harvest. He said that a loss of this magnitude should have been known ahead of time.
Mr. Lanthier introduced into evidence a 1996 Yield Report of 67 other corn insurance contracts in Bayham Township. This report shows an actual average yield of 122 bu./acre.
Mr. Lanthier stated that he went to the custom operator’s place of business to verify the inputs used on the field and to ensure that the Ash's had used good management practices. He stated that he saw the field on January 9, 1997 and has walked the field since then and did not see anything that would have verified such a low yield. In his special adjuster's report dated January 9, 1997, Mr. Lanthier states:
“The corn crop looked fairly weed free. All the corn stocks look normal. The crop was harvested by custom combine. There is some drowned out spots.”
Mr. Ilnycki produced into evidence the 1996 Crop Plans Brochure and referred to page 8, insured perils. Insured perils for corn are drought, excessive moisture, flood, insect infestation, wind, hail, excessive rainfall, frost, plant disease, wildlife. He said that Agricorp has been unable to determine that an insured peril was the cause of loss of production.
Mr. Ilnycki said that the onus is on the insured to identify the peril causing the crop loss. He said this is usually done by opening a claim and letting Agricorp staff see the crop before harvest. Mr. Lanthier said that since Agricorp was not able to identify the cause of loss and was not notified before harvest, it is denying the claim.
Mr. Ash said they didn't know they were going to be in a claim situation until after harvest. He said the low production was a surprise to him. Mr. Ash said he feels the peril that caused the low yield was the water damage in the spring.
The Findings
Evidence presented satisfied the Board that good farm management practices were used when planting the crop.
Testimony from the appellants was that the land was not well drained. In the opinion of the Board, lack of tile drainage combined with the fact that Michael Ash appears to have a lack of experience at growing corn could be factors contributing to the production loss.
Mr. Ash did report in June that his crop was in trouble. In the opinion of the Board, since Mr. Ash was a first-time insured, and had reported a problem that would require reseeding, Agricorp should accept some responsibility for inspecting his field.
The evidence presented convinced the Board that some of the loss was caused by insured perils.
In the opinion of the Board, there were a combination of perils, some insured and some uninsured, that caused crop production to be reduced on this field. The early spring rains plus weather conditions throughout growing season could have contributed to the production loss.
The evidence before the Board is that Mr. Ash did not report a potential production claim before or during harvest so that Agricorp could verify the claim.
In the opinion of the Board, Michael Ash didn't fully understand that reporting a production claim before harvest was an important factor in realizing on a claim.
In the opinion of the Board, any crop that needs to be reseeded in the spring is already under stress.
Decision and Reasons
After careful consideration of all the evidence and submissions before it, the Board decided to partially grant the claim and assessed the costs of the loss as follows: 40% to the insured and 60% to the insurer.
The Board also decided that the reseeding benefit on the four acres should be paid to the Ash's.
The reasons for the Board's decision are as follows:
Michael Ash was a first-time insured and may not have been fully aware of all of the procedures for opening a potential claim. In the opinion of the Board, if Agricorp staff had seen the crop when reseeding took place in June, they may have been aware of a potential claim and could have fully advised Mr. Ash to open a production claim before harvest.
Evidence presented convinced the Board that some of the crop damage was caused by insured perils of excessive moisture and excessive rainfall. The Board was also convinced that some of the reduced production was caused by uninsured perils.
In the opinion of the Board, the Ash's must accept some of the responsibility for not opening a production claim before harvest was completed.
Order of the Board
The Board orders Agricorp to:
Pay the insured, Michael J. Ash, a reseeding benefit on the four acres of corn. The Board calculates this as follows: 4 acres @ $45/acre = $180.00.
Pay the insured, Michael J. Ash, 60% of his potential production claim. The Board calculates this as follows: $6,963.67 (potential claim) x 60% = $4,178.20.
DATED AT McGregor, Ontario this 8th day of April, 1997.