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:
Frew v Agricorp
Frew v Agricorp 2001 ONAFRAAT 45
STATUTE:
Crop Insurance Act
HEARING:
September 7, 2001
DATE OF DECISION:
October 5, 2001
2001-45
NEUTRAL CITATION:
2001 ONAFRAAT 45
Frew v Agricorp
IN THE MATTER OF Ontario Regulation 140/96 under the Crop Insurance Act (Ontario) 1996, S.O. 1996, C. 17, Schedule C.
AND IN THE MATTER OF: An Appeal to the Agriculture Food and Rural Affairs Appeal Tribunal by Mitch Frew, Port Hope, Ontario, from the decision of AGRICORP to deny him a claim concerning his 2000 carrot crop under Regulation 380/97 and the Crop Insurance Plan For Vegetable Crops (processing vegetables).
Before:
Denis O’Connor, Vice Chair; Terry Denison, Vice Chair; Murray Cardiff, Member
Appearances:
Mitch Frew, appellant
Barry Roberts, Regional Claims Manager, AGRICORP
Jim Zavitz, Senior Manager, Provincial Claims, AGRICORP
Fred Thomson, Regional Claims Manager, AGRICORP
DECISION OF THE BOARD
This appeal was heard in Brighton, Ontario on Friday, September 7, 2001. Mr. Mitch Frew appealed to the Agriculture Food and Rural Affairs Appeal Tribunal (the Tribunal) from a decision by AGRICORP to deny him a claim concerning his 2000 carrot crop under Regulation 380/97 and the Crop Insurance Plan For Processing Vegetables.
Background:
Section 10 of the Crop Insurance Act (Ontario), 1996, states:
10 (1) If AGRICORP and a person disagree whether the person qualifies for a contract of insurance, except if the disagreement relates to the time during which a person may apply for a contract of insurance or file a final acreage report or its equivalent, or if AGRICORP and an insured person fail to resolve a dispute arising out of the adjustment of a claim under a contract of insurance, either may appeal the matter in dispute to the Tribunal.
10(2) To appeal a matter in dispute, the appellant shall file a written notice of appeal with the Tribunal and send a copy of the notice to the other party within the time specified by the regulations made under this Act.
Ontario Regulation 380/97, Sections 3 states:
3 (1) A contract of insurance consists of,
(a) the application;
(b) the renewal notice and change notice, if any;
(c) the final acreage report or its equivalent;
(d) the terms fixed by AGRICORP under section 5 of the Act; and
(e) this Regulation.
3 (2) In the event of a conflict between the terms of a contract of insurance and this Regulation, this Regulation prevails. O. Reg. 380/97, s. 3.
AGRICORP’s Crop Insurance Policy Contract of Insurance outlines the following insured perils for carrots grown for processing: drought, excessive heat, excessive rainfall, flood, frost, hail, wildlife, wind, freeze, and insect infestation and plant disease provided recommended control practices are followed.
The Issue
The issue before the Tribunal was:
Did AGRICORP fairly adjust the 2000 claim of loss by Mitch Frew?
The Evidence and the Findings
Mitch Frew, appellant
Mr. Mitch Frew testified that 2000 was a poor year for crops from the Spring through to the Fall. He said his farm missed the worst weather and he had a decent carrot crop. But he explained that potato and celery growers in the Bradford area had problems all year, which carried through to harvest. He said that because he shipped to the same processor as these growers – Campbell’s Soup – their problems had an impact on him.
Mr. Frew explained that the processor had problems with poor quality vegetables which slowed down the processing line, and as a result could not accept all of his carrots at the usual time. He said his contract was for field run carrots but he did try to accommodate Campbell’s Soup by storing four loads of carrots at Bradford Co-op. But he said he was unable to find storage for the remainder of his crop and it subsequently froze in the field.
Mr. Frew said the first frost in his area was on November 20, 2000 and he phoned Mr. Gordon Jibb, an AGRICORP adjuster a few days later. He said he filed a crop insurance claim in early December. He said that Mr. Fred Thomson subsequently visited his farm but that Mr. Thomson did not believe his claim was eligible, as he thought Campbell’s Soup was at fault, as it did not accept the carrots. Mr. Frew submitted that it was unusual weather throughout 2000 that led to slowdowns at the processing plant and the subsequent freezing of his crop. He told the Tribunal he lost $30,000-$40,000 on the carrots, including the storage cost he incurred. He said he wanted to know whether AGRICORP or the processor was responsible for his losses and he asked the Tribunal to order AGRICORP to pay his claim.
In response to questions, Mr. Frew indicated:
All his production was under contract to Campbell’s Soup. The contract was for 2.5 million pounds.
He agreed he was 134.01 tons short of his guaranteed production.
All his carrots were the same variety and all were planted within a three-day period. He started harvesting carrots on September 27, 2000 and November 20, 2000 was the last possible harvest date due to the frost and snow. His harvest was slower than in past years because Campbell’s Soup had problems in its processing plant due to weather-related problems with other crops.
He tried to rescue the crop by harvesting and storing it. He would have stored more of his crop if he could have found more storage facilities. Even stored product harvested in the area was spoiling due to high moisture.
His stored carrots were processed on December 21, 2000.
He tried to find an alternate buyer in Ontario and the United States but was unsuccessful.
Mr. Jibb estimated the volume of carrots in storage when he made his yield declaration report on December 11, 2000. It was understood this would be adjusted when actual weights were known at processing.
Of 80 planted acres, he had 15 acres of crop left in the field. He could have harvested these carrots in 1.5 days in optimum conditions. He worked a 12-hour day during harvest.
In 2000, he was digging three days per week and he estimated he was harvesting approximately 30 days of the 67-day shipping period.
He had been growing for Campbell’s Soup for 14-15 years.
He owns appropriate harvesting equipment and trucks.
He probably could have harvested acceptable carrots after the first frost, but they would have had top burn.
He would have harvested the crop if there had not been a frost until early December. As a last resort he would have surface stored the carrots in a pile.
Out of 15 years he estimated he had harvested carrots in December on three occasions, but the crop is normally harvested by November 20th.
After a 1” rainfall, he normally has to wait two days before he can go back on his fields.
He normally ships five loads per week to Campbell’s Soup in the harvest period but this was reduced to two or three loads per week in 2000. The processor phones him each Friday in the harvest period to schedule deliveries.
He would have been able to harvest the carrots on or about December 1, 2000 but the processor could not accept them.
He had an average yield in 2000 on the acres that were harvested.
Carrots are under the jurisdiction of a marketing board. The marketing board negotiates his contract.
There were only two carrot growers in his area.
Jim Zavitz, AGRICORP
Mr. Jim Zavitz told the Tribunal that he appreciated that 2000 was a challenging year, but that he believed this was an avoidable loss as the carrots could have been harvested. He said that AGRICORP did not insure against a lack of storage or a refusal by a customer to accept the crop. He pointed out that another carrot grower in the area was able to harvest his crop.
In response to questions Mr. Zavitz explained:
There is no fixed date by which carrots must be harvested but farmers are expected to follow the management practices common in their area.
All crops will freeze eventually if left in the field, AGRICORP covers damage due to frost but the grower must attempt to harvest the crop at the appropriate time.
Barry Roberts, AGRICORP
Mr. Barry Roberts told the Tribunal he had been with AGRICORP for eight years and was the Regional Manager for Central and Northern Ontario. He said he supervised 10 adjusters to ensure the jobs are done correctly and clients receive good service. He said he had previously worked in fruit and vegetable inspection on the Bradford Marsh and at a muck research station. He said he was familiar with the agricultural practices in the area and had 20 years experience with carrot harvesting.
Mr. Roberts outlined the expectations AGRICORP had of its customers and explained that its concerns with Mr. Frew were that:
He did not harvest the crop in a timely manner. AGRICORP’s policy of insurance required that the crop be harvested in a timely manner during the average harvest period reflective of good farm management practices. AGRICORP believed there was an opportunity to harvest the crop before it was damaged by frost.
He did not notify AGRICORP within 5 days of the damage occurring. AGRICORP was not notified until December 11, 2000 of the damage to the crop.
Mr. Roberts said that carrots could be stored in a wagon for 1-2 weeks in the Fall but that specialized storage was required for long term storage.
Mr. Roberts said that he had driven by Mr. Frew’s crop on July 14, 2000 and it appeared to be a good crop at that time. He said the weather in the area in the Fall of 2000 was suitable for harvesting carrots. He told the Tribunal a carrot producer in the area had harvested his entire crop with an above average yield.
In response to questions, Mr. Roberts indicated:
There was only one other insured carrot producer farming near Mr. Frew, a grower with 78 acres of carrots.
That producer shipped to a processor that only processed carrots.
Based on his knowledge of the area and the weather conditions in 2000 he believed the crop could have been harvested in early December. AGRICORP did not have an opportunity to inspect the crop until December 11, 2000.
Carrots cannot be harvested when there is snow on the ground.
AGRICORP does not insure against damages incurred in storage.
AGRICORP’s coverage is limited by its requirement that growers follow good farm management practices.
Each year is a bit different, but most people harvest carrots by mid-November. In a bad year all producers in an area may not be able to get the crop off in a timely manner and this would not be considered a poor management practice.
A decision by a processor to change their schedule for receiving carrots is not an insured peril.
In his opinion, Mr. Frew could have harvested the carrots and put them in short term storage, rather than leave them in the ground. If he had seen the crop on December 1st, he may have advised Mr. Frew accordingly.
The frost damage on November 21, 2000 was not reported to AGRICORP until December 11, 2000.
Fred Thomson, AGRICORP
Mr. Fred Thomson said he had been involved with crop insurance for 10-11 years and had been an adjuster of processing vegetable crops including carrots. He said he was familiar with Nothumberland County and said there was a relatively small acreage of processing vegetables grown in Mr. Frew’s area.
Mr. Thomson said he became involved with Mr. Frew’s claim when Mr. Roberts asked him to follow up on the yield declaration report prepared by Mr. Gordon Jibb on December 11, 2000. He said he met with Mr. Frew in February 2001 to identify why 15 acres of carrots were still in the field. He said Mr. Frew told him that Campbell’s Soup was unable to take more carrots before freeze up, and there was no storage. He said he told Mr. Frew that he was not eligible for a crop insurance payment at that meeting. He explained that if Mr. Frew had harvested the last 15 acres he would have had more than his guaranteed minimum volume of carrots. He explained that AGRICORP policy provides that where an uninsured peril reduces yield, the insurer can use this to reduce the claim. Mr. Thomson submitted there was an opportunity to harvest the remaining 15 acres before freeze up and the inability of the processor to take the crop caused the problem. He said this was not an insured peril.
Mr. Thomson testified that Mr. Jibb told him he made at least three telephone calls to Mr. Frew starting in early November as he wanted to complete the yield report; and also that Mr. Frew had called him just prior to December 11, 2000 to report that he could not harvest any more acres.
Mr. Frew verified that he had spoken to Mr. Jibb by telephone on approximately three occasions but said they mainly discussed the weather. He said there was no discussion of damages as he was still intending to harvest the crop.
In response to questions, Mr. Thomson said:
With respect to the normal harvest period for carrots every year is different but it is the grower’s responsibility to harvest in a timely manner. When the crop is mature it should be harvested. There may be carrots harvested in December in some years, but no farmer would think that was normal.
He believed that Mr. Jibb did not complete a yield report for Mr, Frew in November as Mr. Frew was still trying to harvest the carrots.
He did not have weather records for December 2000.
Carrots have a longer ‘window of opportunity’ for harvesting than more persihable crops such as Spring grain.
If AGRICORP knew of the claim earlier it would have set up an immediate meeting to examine the crop and assess the possibility for salvage.
AGRICORP does use its discretion when looking at the date that damage was reported. It has paid claims when no damage was reported, also at its discretion, if it can determine that an insured peril was the principle cause of loss.
Growers are encouraged to call the Customer Action Centre and report damage. Confirmation numbers are given to growers who report damage.
Summations
Mr. Frew told the Tribunal that 2000 was a terrible year for all processing vegetable growers and it was necessary to work in cooperation with others to make the system work. He said he believed that what he did was right and that he took all steps possible to harvest the crop. Mr. Frew said his situation was not comparable with the other carrot grower in his area, as Campbell’s Soup required a variety of vegetables, whereas the other processor only bought carrots. He said the problem was definitely caused by weather and no one did anything wrong. He said he was looking for some assistance and compassion from the Tribunal.
Mr. Zavitz submitted that AGRICORP could only pay claims on insured perils. He said that Mr. Frew had agreed that he had a mature crop in the field and that his problem was that Campbell’s Soup could not accept the carrots when they were ready to be harvested. He said that as the processor actions contributed to the loss, the claim could not be paid. Mr. Zavitz maintained there was an adequate harvest window and Mr. Frew had the appropriate equipment to harvest the crop. He said that he believed the Tribunal should give weight to the evidence that Mr. Frew’s neighbor was able to complete the harvest of a similar crop, although to a different processor.
Findings
The Tribunal finds that it cannot make a determination as to when Mr. Frew reported the damage to his crop to AGRICORP. It is clear that he was in communication with the insurer in November 2000. The Tribunal cannot ascertain precisely when AGRICORP’s adjuster knew of the frost damage to Mr. Frew’s carrots. The Tribunal notes that both parties referred to Mr. Jibb in their submissions and either party may have benefited from his direct testimony, yet neither party took steps to ensure his presence at the Hearing.
The Tribunal finds that the frost damage that occurred was the result of the carrots being left in the field beyond the time at which they could have been harvested. The Tribunal is not persuaded that weather conditions prevented the harvest of the crop. The evidence was that the appellant had a good crop in the field but that he chose not to harvest it due to scheduling difficulties experienced by his processor and a lack of long term storage facilities in his area. The Tribunal was satisfied that there was adequate time for Mr. Frew to harvest his crop of carrots in the Fall of 2000.
Decision and Reasons
After careful consideration of the evidence filed and submissions made, the Tribunal decided to deny the appeal for the following reasons:
The loss was not covered by an insured peril.
There was no evidence that the weather conditions in the Fall of 2000, in the area of the appellant’s farm, prevented the carrots from being harvested in a timely fashion.
DATED AT Guelph, Ontario this 5th day of October, 2001.