Grima v. Agricorp, 2005 ONAFRAAT 10

Agriculture, Food and Rural Affairs Appeal Tribunal

1 Stone Road West Guelph, Ontario N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email:Tribunal@OMAF.gov.on.ca

Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales

1, chemin Stone Ouest Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email:Tribunal@OMAF.gov.on.ca

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL: Grima v Agricorp

Grima v Agricorp 2005 ONAFRAAT 10

STATUTE: Crop Insurance Act

HEARING: April 14, 2005

DATE OF DECISION: April 27, 2005

2005-10

NEUTRAL CITATION: 2005 ONAFRAAT 10

IN THE MATTER OF The Crop Insurance Act (Ontario) and 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 Rick Grima, Prescott, Ontario from a decision of AGRICORP concerning the adjustment of his claim for his 2004 soybean crop under Regulation 380/97 and the Grain and Oilseeds Insuring Agreement.

Before: Kirk Walstedt, Vice Chair; Denis Perrault, Member

Appearances: Rick Grima, appellant Fred Thomson, Regional Manager, on behalf of the respondent, AGRICORP Ian Conklin, witness for the appellant Bryan Cook, witness for the respondent John Seabrook, witness for the respondent Dean Patterson, witness for the respondent

DECISION OF THE TRIBUNAL

This appeal was heard in Prescott, Ontario on Thursday, April 14, 2005. Mr. Rick Grima appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal (the Tribunal) from the decision of AGRICORP concerning the adjustment of loss under Ontario Regulation 380/97 and the Crop Insurance Plan for Soybeans for his 2004 soybean crop.

A panel of three Tribunal Members was selected to hear this matter, but one Member was unable to complete the hearing. That Member had no input into this decision.

Statutory Context

Section 10 of the Crop Insurance Act (Ontario) states:

Referral of disputes

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.

Notice of appeal

(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.

Exclusive jurisdiction

(3) The Tribunal has exclusive jurisdiction to hear and determine all appeals arising under subsection (1).

Decision binding

(4) The decision of the Tribunal in an appeal is binding on the parties. 1999, c. 12, Sched. A, s. 7 (2).

Preliminary Matters

Mr. Grima asked that AGRICORP’s witnesses be excluded from the proceeding until they had given their testimony. Mr. Thomson did not object and the Tribunal so ordered. Mr. Thomson had no objection to Mr. Grima’s witness staying in the hearing room.

Mr. Grima asked that a number of late-filed documents and photographs be accepted by the Tribunal. Mr. Thomson had no objection to the documents but noted that there were no identifying factors on many of the photographs. The Tribunal accepted the documents and photographs.

The Issue

The issues before the Tribunal are:

1. What caused the damage to the 2004 Goyer soybean crop?

2. How should the crop insurance claim be adjusted?

The Evidence

Rick Grima

Mr. Rick Grima told the Tribunal he had insured 500 acres of soybeans with AGRICORP in 2004. He said AGRICORP staff had measured his fields and claimed there were only 418.4 acres planted, but that AGRICORP neglected to include approximately 60-70 acres on his home farm which had been planted but later plowed down. Mr. Grima testified that John Seabrook, an AGRICORP adjuster, had advised him to do whatever he liked with those soybeans as there was no yield on that field and it would not be counted. He said that even without that field he had at least 500 acres of soybeans planted in 2004. Mr. Grima said the meter on his seeder showed 550 acres not counting the home farm. He also said that he was allowed a margin of 15% error in reporting acreage. Mr. Grima also questioned the accuracy of AGRICORP’s figure as he pointed out a 2 acre field appeared to have been missed.

Mr. Grima told the Tribunal there had been a problem with sprays which resulted in damages to his crop. He said all his sprays had been purchased from Agri-West Corporation, which had since gone into receivership. He said he could provide most of the receipts for sprays but could not obtain missing receipts from Agri-West Corporation.

Mr. Grima told the Tribunal that AGRICORP had harassed him as John Seabrook had phoned him repeatedly. He said AGRICORP had threatened to revoke his insurance as it claimed he was being uncooperative and that AGRICORP staff had contacted his lender and shared confidential information, when they should have come to him.

Mr. Grima pointed out that an Adjuster’s Special Report dated August 2, 2004 indicated his soybean acres had been planted in time and the crop looked good, comparable to other crops in the area. He said that an August 26, 2004 report indicated that 50 acres were poor and the crop had low fertility and weeds. He suggested this was inconsistent with the earlier report.

Mr. Grima said he purchased fertilizer from Mr. Gordon Conklin and at auction sales. He said he told Mr. Seabrook that it had been spread on his properties. He told the Tribunal Mr. Ian Conklin spread the fertilizer and that 14 tonne of fertilizer was spread.

Mr. Grima said he had applied all the sprays to the soybean crop. He said he used Broadstrike-Dual and Roundup and paid $35-$45 per acre on herbicide sprays. He said he understood that Broadstrike-Dual lasted for 120 days and should have stopped weeds from growing up between the soybeans.

Mr. Grima testified that AGRICORP representatives had admitted that they had insured him at too high a yield, but submitted this was not his fault. He said he had 90% coverage on 34 bushels/acre and that was what his premium was paid upon. He told the Tribunal AGRICORP now said it would not pay his claim and will likely not offer the same amount of coverage in 2005. He submitted this was unfair. Mr. Grima also said he was only given four days to consider AGRICORP’s settlement offer and it arrived over Christmas when he had family commitments. He said this was the first year he had farmed and he felt AGRICORP was bullying him into accepting its offer.

Mr. Grima said AGRICORP had compared his yields to the yields obtained on tile drained fields in his area and that this was not a fair comparison. He said other grower’s yields had nothing to do with his farming practices. He said he wanted full compensation for his claim and wanted it paid at today’s soybean price, $260/tonne, not the floating option price offered by AGRICORP in its settlement. He told the Tribunal AGRICORP would not have offered a settlement if it did not believe he deserved a payment. He said AGRICORP was trying to make up for its poor underwriting decision by denying him payment of his claim.

Mr. Grima told the Tribunal some of his fields were wet during harvest and this made it difficult to harvest all the soybeans. He said he used the herbicide he understood was needed and when weeds appeared, AGRICORP said it was too late to spray again as he did not have Roundup Ready soybeans. He said if the sprays he used did not work then that was what he had insurance for. He said he could not sue his supplier as it was in receivership.

In response to questions, Mr. Grima indicated:

• The first time an AGRICORP adjuster visited him was August 2, 2004.
• On that date, Mr. Seabrook told him he was in a claim position on that 50-60 acres as it could not be harvested.
• He believed he still had over 500 acres of soybeans planted; he reported 500 acres to AGRICORP.
• He bought the fertilizer on May 30, 2004. He did not include his promissory note with documents circulated in advance of the hearing as he could not find it.
• He selected a floating price option using an average farm yield of 34 Bu/acre.
• He did not use certified seed.
• He did not know how much fertilizer was applied per acre, but his witness had that information.
• AGRICORP made its settlement offer on December 23, 2004.
• He did not think the offer was reasonable as he paid almost the same amount in premiums. He still did not think it was a fair offer.
• Settlement should be based on today’s prices; he still had 35 tonne of soybeans in a bin to sell.
• He obtained a yield of 11.4 Bu/acre. He reported every weigh slip.
• He told Mr. Seabrook on August 2, 2004 that he did not want to be in a claim position as he was a new customer. After walking through the crop on the home farm, Mr. Seabrook said he could plow it down.
• He applied the herbicide himself on the advice of an employee of Agri-West Corporation.

Ian Conklin

Mr. Ian Conklin told the Tribunal that Mr. Grima received financing for his soybean crop based on guaranteed production of 34 Bu/acre on 500 acres of soybeans. He stated that aside from approximately 50 acres of soybeans on the home farm, the crop looked good on August 2, 2004. He recalled that Mr. Grima bragged to him that Mr. Seabrook told him the fields looked better than they had in the past when he, Mr. Conklin, had planted them. Mr. Conklin said it was not fair to take off the acreage at the home farm as it would have lowered the overall average production had it been included.

Mr. Conklin said some of the fields planted by Mr. Grima were marginal land, not tiled and were close to rock and swamp. He said he told Mr. Grima he would not get 34 Bu/acre on those fields. He said this was due to the nature of the fields, not Mr. Grima’s management. He said he had experience with those fields and had obtained 16-20 Bu/acre on them. He said they could not be compared to tiled land.

Mr. Conklin said Mr. Grima purchased fertilizer from his father as they had extra, and that he spread it on the fields. He said he set the spreader at approximately 100 lbs per acre, and spread as far as he could go. He said he did not spread fertilizer at Mr. Grima’s home farm.

Mr. Conklin said Mr. Grima consulted him about weeds in August 2004, but that after August 2, 2004 the soybeans were reaching maturity and there was no return in investing in an extra $40 per acre in spray. He said he knew Mr. Grima was acting on the advice of Agri-West Corporation as he was present when he spoke to the company representative on the phone. He said the sprayer was calibrated to spray 10 acres per tank and the Agri-West Corporation employee calculated the amount of chemical required.

In response to questions, Mr. Conklin indicated:

• The contract of insurance was based on 34 Bu/acre average farm yield; he understood this was not the same thing as guaranteed production.
• He applied Triple 19 fertilizer at a rate of 100 lbs/acre.
• This fertilizer had a balance of everything in it; it had been purchased for corn but there was some leftover.
• No soil testing was undertaken before the fertilizer was selected.
• Mr. Grima’s sprayer was a Hardy with a capacity of 30 gallons. It was set at 30 gallons of solution per acre.
• He was not present when Mr. Grima sprayed the soybean crop but had seen him spray in the past. He believed the spray had been correctly applied.
• He had experience cropping approximately 300 acres that were cropped by Mr. Grima in 2004. Approximately half had been in wheat two years before. Some had been in continuous soybeans for several years.
• He estimated there were approximately 50 acres at the Grima home farm.
• Mr. Grima first asked him what the correct application rate of the spray was, then called Agri-West Corporation and their representative gave Mr. Grima the same advice.

Bryan Cook

Mr. Cook testified that he had graduated from the University of Guelph in 1993 with a degree in Crop Science, and had been in sales for three years before starting a private crop consulting firm in Fall 1996. He said he had 120-130 clients. Mr. Cook said he was a Certified Crop Advisor, Certified Nutrient Management Planner and a Member of the American Society of Agronomy. The Tribunal qualified him as an expert witness.

Mr. Cook said he was retained by Mr. Seabrook in Fall 2004 to inspect fields for weed pressure and take some soil samples. He confirmed that he had written a report that was circulated to parties before the hearing. Mr. Cook said that pH and phosphorous were important for soybean production. He said the pH was excellent on the fields he tested but the phosphorous and potassium tests were low. He said anything below 9 on the phosphorous index was considered low and some of the Grima fields tested at 5. He explained there was a high probability of increased yield if phosphorous were applied to these fields. He said fields that tested lower than 60 for potassium would benefit from its application. Mr. Cook said soybeans generally did not respond to fertilizer unless there was a soil nutrient in the low fertility range.

Mr. Cook told the Tribunal that ragweed was the predominant species of weed on the Grima fields that he inspected but there were other weeds present. He said Broadstrike-Dual was weak in controlling ragweed and he recommended a product called First Rate. While not a registered tank mix, Mr. Cook said the two products had been combined in the past two years. He said a good canopy of soybeans was the best defense against weeds.

With regard to the Grima soybean crop, Mr. Cook said the weeds present would definitely interfere with harvest. Based on their height he said the weeds were present before flowering and therefore would have had an impact on yield. He explained that if weeds were present between the first and third trifolium they would affect the yield.

Mr. Cook said the average soybean yield in Augusta Township is 33 Bu/acre and that most growers met or exceeded that in 2004. For Edwinsburg Township, he said the average yield is 36 Bu/acre, and 2004 was also a good year in that township.

Mr. Cook also indicated:

• The seedbed preparation for the Grima crop varied from smooth to rough. Some were rough to the extent that the harvest would be affected.
• Inoculating soybeans gives a good yield response on virgin land; if soybeans had been grown there the year before you can expect 1-2 Bu/acre additional yield.
• On coarse soils, soybeans should be inoculated more often. But it was a recommended practice to inoculate every year.
• There was average rainfall and slightly below average temperatures in 2004. The harvest time ranged from average to slightly ahead of average.
• The yield loss on the Grima crop was not caused by an insured peril.
• From what he observed in Fall 2004, the soybean plant population was below average and the fertilizer level was low.
• He was not familiar with Mr. Grima’s farm management practices.

In response to questions from the appellant, Mr. Cook indicated:

• Applied pre-emergent, Broadstrike-Dual needs rain within 7-10 days or it is not activated and there will be weed escapes. At that point, a decision must be made as to whether or not to take remedial action. If there is rain and the product is activated it should provide weed control for 4-6 weeks which would allow crop to establish itself.
• With a pre-emergent product that is not activated there is probably approximately 40 days to remedy the problem.
• Excessive rain would cause Broadstrike-Dual to leach out and not provide coverage for as long.
• Once soybeans have flowered, any remedial action on weed control is probably not a good investment. Remedial action has to occur from planting up to first flower.
• If the crop was weed-free at flowering, any weeds that come up after that point should not affect yield, provided there is a good canopy.
• He could not say if the proper amount of pesticide was used, but if it was applied correctly, this was the worst weed control he had ever seen from Broadstrike-Dual.
• If rain washed the herbicide away, remedial action could be taken. Weed control is not an insured peril.
• In virgin soybean ground he would consider inoculant a necessity. It is an external bacterium that has a symbiosis with the soybean plant and has the ability to fix atmospheric nitrogen. Nodules can provide 50-75% of the nitrogen requirements of the plant.
• Inoculant can survive in soil if the pH is around 6, but not at the levels he would like for soybean production.
• Drainage would be his first priority to obtain good yield; not having tile drainage presents more of a risk.

John Seabrook

Mr. Seabrook testified that he had been an Adjuster with AGRICORP for 18 years. He said he graduated from Kemptville College in 1953, had been in the pedigreed seed business, seed cleaning and farming. He said he had many years experience with soybean production.

Mr. Seabrook said he first visited the Grima farm on August 2, 2004 and he drove around to the various farms Mr. Grima had in soybean production. He said he explained he would do a follow up report and needed invoices for seed, fertilizer and weed control purchases. Mr. Seabrook said the crop was approximately six inches high on that date.

Mr. Seabrook said he next inspected the Grima crops on August 26, 2004. He said on the Conklin farm there were 30 acres that were fair but below average and 50 acres with lots of weeds and poor fertility. He said the Myers farm, 25 acres, had excessive weeds and poor fertility; the Toussant farm, 22 acres, had a decent crop; the Klye Road farm, 30 acres, was below average, had another crop growing in it and was a very poor colour, as if it lacked nitrogen. He said the Visser farm, 25 acres, had a good crop of soybeans.

Mr. Seabrook said he visited the Grima soybean fields with his area supervisor on September 8, 2004. He said it was very wet that day but the crop on the Good farm looked good; the Green farm, 10 acres, was a poor crop with small pods and low plant population; the Myers farm had a good crop with some weeds in it; the Dupont farm and the neighbouring farm had below average crops with lots of weeds; and the Ward farm had a good crop but it was full of weeds. He said they visited Mr. Grima at his house and tried to get receipts for seeds and chemicals. He said it appeared there was a small amount of fertilizer used, and some fields did not receive any. Mr. Seabrook said Mr. Grima was upset that they were asking for invoices.

Mr. Seabrook said on September 13, 2004 he inspected the Dupont farm and estimated that the weed damage had caused approximately 20 Bu/acre loss of yield. He said there was some deer damage at the back of the fields.

Mr. Seabrook said he was only out on the fields with Mr. Grima on two occasions but that their working relationship was good except that Mr. Grima was reluctant to provide information to him and was upset that he was being asked for it. Mr. Seabrook said the insurance policy required the customer to provide this information but that Mr. Grima did not seem to understand the policy.

Mr. Seabrook said he met again with Mr. Grima on October 18, 2004 and received maps of fields at that time but no receipts or invoices. He said he never did receive any documentation on fertilizer. He said he showed Mr. Grima that there were field losses during harvest due to rough ground and told him that field losses were not an insured peril.

With regard to the soybeans planted on the Grima home farm, Mr. Seabrook said there was no evidence of emergence on August 2, 2004 and Mr. Grima assured him he had well over 500 acres without those soybeans. He said Mr. Grima told him he did not want the soybeans on the home farm covered and he, Mr. Seabrook, agreed to ignore those acres.

Mr. Seabrook also told the Tribunal:

• He was familiar with some of Mr. Grima’s fields as Mr. Conklin had farmed them for several years, sometimes with disastrous results.
• On the size of claim made by Mr. Grima AGRICORP verified the acreage with a global positioning system (GPS).
• He mentioned weeds to Mr. Grima on his first visit.
• Lambs quarters and ragweed were the predominant weed species in the Grima crop.
• Low germination, the quality of seed, lack of inoculant and uneven ground would all contribute to poor weed control.
• The seedbed preparation varied by farm. There were several places with filled in furrows and rough ground. At one farm the combine was crossing furrows.
• There were some excellent crops of soybeans in the areas that Mr. Grima’s crops were grown. He had the same weather conditions and with good fertility and similar management his crops should have had the same yield.
• Historically, soybean growers achieve yields of 38 Bu/acre in this part of the province. Some got over 40 Bu/acre in 2004.
• He verified Mr. Grima’s yield as 11.4 Bu/acre. Of the 418.4 acres planted, all were harvested.
• Growers were allowed to vary 3% from the acreage they report to AGRICORP.
• Mr. Grima was covered at 90% of an average farm yield of 34 Bu/acre; the guaranteed production was 30.6 Bu/acre.
• For the settlement offer, he revised the coverage down to half the guaranteed production, or 17 Bu/acre. The settlement was calculated at 5.6 Bu/acre; the floating price was the same one used across the province.
• Part of the reason that AGRICORP agreed to offer a settlement was because it realized it made an underwriting error.
• Approximately one third of the Grima crop was good, although below average. The balance had fertility problems and other factors involved.
• AGRICORP cannot pay a claim unless an insured peril caused the damage to the crop. In his view, excessive weeds were the main cause of reduced yields on the Grima soybean crop.
• AGRICORP expected growers to use recommended practices; insurance claims could be denied due to poor farming practices.
• He was not aware of any severe weather in the area that would have caused a pesticide to fail. There were generally good weather conditions in 2004.
• Weeds had an impact on the Grima soybean crop from the start.

In response to questions, Mr. Seabrook indicated:

• Mr. Grima told him he was reluctant to provide information to AGRICORP as he was concerned that it would be used against him.
• He had more photographs of the Grima crop than were submitted to the Tribunal. The photographs showed some of the worst fields but were representative of some of the other fields. There was a different weed mix and the weeds were not as high in some of the other fields.
• The Ward farm had a good crop of soybeans but there were weeds present.
• He and Mr. Grima went into a couple of field on his first visit.
• The John Ashby property, on which a high yield was obtained, was tile drained.
• White mould, deer loss, excessive rainfall and aphids are all insured perils.
• Mr. Grima was entitled to some compensation under his insurance policy.
• He did not discuss the weed problem with Mr. Grima until his second visit. A good manager would have sprayed for weeds when they were evident on August 2, 2004.
• All insured acres were to be reported. Mr. Grima told him he did not want to claim for soybeans at the home farm and that he still had over 500 acres planted. He insured 500 acres with AGRICORP.
• The home farm was not listed on the application for insurance.
• With un-tiled land, a grower may have to wait a few days before planting due to wet conditions.
• When soybeans are 1-1.5 feet high they will form a canopy which blocks out weeds.
• AGRICORP had the right to access production records and reasonable entry to farms.
• On his application form, Mr. Grima claimed 200 acres were owned and 300 acres were rented.

Dean Patterson

Mr. Patterson told the Tribunal he had been an Adjustor for AGRICORP for five years and also worked as a grain inspector and farmed 650 acres. He said he grew 300 acres of soybeans every year.

Mr. Patterson said he had been conducting GPS measurements since 2001 and that he measured 12,000 acres in 2004 and 8,000-10,000 acres in prior years. He said he measured the fields Mr. Grima’s soybean crop was in and they came to 418.4 acres. He said GPS was probably the most accurate method of measuring acreage and that AGRICORP had the most modern GPS equipment. He explained it used 4-8 satellites and would only give a reading if it could make an accurate reading. Mr. Patterson said he could have made an error and missed adding 2 acres on the Visser farm to the total acreage, or it could be that those two acres were not seeded.

Mr. Patterson said AGRICORP allowed a 3% variance in reporting acreage but that the Grima acreage had been over-reported by 16%. He said most growers measured with a wheel or a seed drill. He said it was not uncommon for growers to overestimate the size of their fields.

Mr. Patterson also stated:

• He did not measure the Grima home farm.
• He measured the fields identified on the maps Mr. Grima provided to Mr. Seabrook.
• He was not familiar with the area where Mr. Grima’s crop was grown. The land was slightly undulating; he did not measure topography, just acreage.
• Yields of soybeans varied depending on the variety planted and the management of farms.
• Herbicide programs are up to every farmer to manage.
• He was not involved in adjusting the Grima claim.

Fred Thomson

Mr. Grima wanted to call Mr. Thomson as a witness. Mr. Thomson objected on the grounds that he was participating as AGRICORP’s representative. The Tribunal allowed Mr. Thomson to be called to answer questions related to documents he signed and that had been introduced as evidence. Mr. Thomson confirmed that damage from aphids is an insured peril. He also provided clarification on some of the photographs that were submitted to the Tribunal.

Summations

Mr. Grima said he had been in business for twelve years without any confrontations with clients or the public. He said he strongly believed in telling the truth. He told the Tribunal he managed his crops well, using Broadstrike-Dual which was an expensive herbicide. He said there was a lot of rain when he planted the fields and the herbicide could have washed away. He pointed out that AGRICORP had not tested for it when they had soil tests taken.

Mr. Grima said some of his crop was planted on low-lying marginal land and AGRICORP’s position was that it over-estimated the yield that could be achieved on these lands. He submitted that this was not his fault. He pointed out that Mr. Seabrook told him his crop was the best he had seen on the Conklin fields on August 2, 2004. He explained that he had repeatedly called the Kemptville branch of Agri-West Corporation to have them inspect the crops but the company was in receivership.

Mr. Grima said that AGRICORP’s position was that weed damage was not insured, but he argued that the weed damage could have been caused by excessive rain washing away seeds, resulting in a sparse crop. He said AGRICORP could not prove this did not cause the problem and no one was able to say with certainty what did cause the low yield.

Mr. Grima asked the Tribunal to find that he did not have poor farming practices as he spent a lot of money on weed control, then in late August was told there was nothing he could do. He said he fertilized the crop and did things properly. He said that soybean pods were high in 2004 so there should have been no losses due to harvesting on uneven ground.

Mr. Grima submitted that Mr. Seabrook was not allowed to change the underwriting after the fact as he had done by agreeing to leave out the Grima home farm. He said he assumed he still had 500 acres, based on his seed drill measurement. He acknowledged that two small fields were accidentally not reported but said that he was not claiming insurance on those fields as it had been his error.

Mr. Grima pointed out that AGRICORP had admitted there was damage to his crop caused by white mould, deer and aphids. He said excessive rain could have caused the low seed count. Mr. Grima said AGRICORP had offered to settle the claim but did not give him enough time to consider the offer. He said he felt bullied. He said it was not right to say he was entitled to a settlement one day and the next day nothing.

Mr. Grima said it was not fair to compare his fields, which were not tiled, to tiled fields in the area, and that it was unfair to compare conventional beans to Roundup Ready beans. He said his claim should be paid in full, and at current soybean prices. He said he faced double jeopardy as AGRICORP did not pay his 2004 claim, but used the low yield to drop the underwriting guarantee for 2005.

Mr. Thomson said Mr. Grima was a new client of AGRICORP in 2004 and he did not seem to understand his responsibilities under the insurance contract or the proper crop production practices for soybeans. Mr. Thomson said Mr. Grima did not accurately report the acreage he planted. He pointed out that he repeatedly stated he had over 500 acres but only 418 acres were measured in the fields he identified.

Mr. Thomson said Mr. Grima was not successful in growing a crop in 2004. He submitted that his yield was too far below the yields achieved by other growers in the area to have been caused by an insured peril. He said Mr. Grima’s neighbours should have had losses if an insured peril was the cause.

Mr. Thomson said the appeal process cost AGRICORP time and money and it made its offer to Mr. Grima in an attempt to avoid a hearing, and because it acknowledged there had been some damage to the crop due to insured perils. He submitted this was a very minor contributor to the yield loss. Mr. Thomson said AGRICORP also acknowledged it made an error in underwriting.

Mr. Thomson said Mr. Grima refused to accept any responsibility for the low yield. He pointed out that both Mr. Cook and Mr. Seabrook had indicated the yield loss was due to poor farm practices, while Mr. Grima blamed pesticides which did not work and too much rain.

Mr. Thomson said Mr. Grima complained that AGRICORP pestered him but said AGRICORP had every right to collect information about the crop from an insured grower, under the contract of insurance. He said AGRICORP Adjusters react to circumstances provided to them, they do not provide advice to growers as they are not in the extension business. He asked the Tribunal to rule in favour of AGRICORP.

Mr. Grima replied that he did eventually provide information to AGRICORP but that he was not used to pressure and he lost trust in AGRICORP after it contacted his lender.

The Findings

Cause of Loss

The appellant took the position that he did a good job managing the crop. Mr. Grima pointed out that he purchased an expensive herbicide and expected it to work. He testified that he obtained expert advice to ensure he was spraying the herbicide at the correct rate. The Tribunal notes that spending money on certain inputs does not necessarily equate to good yields. It is not unusual to run into weed problems when planting soybeans on marginal land. There was clear evidence of excessive weeds in the photographic evidence. As well, Mr. Cook and Mr. Seabrook both testified that they saw evidence of well established weeds in the Grima soybean crop. While Mr. Grima was inexperienced he could have consulted a crop specialist to help him address his weed problem when they first emerged.

Mr. Grima argued that excessive rain may have caused his soybean seeds to float away but no evidence was provided to show that there was either excessive rain or that seeds were lost in this manner. The evidence was clear that the crop was sparse on some of Mr. Grima’s fields but he admitted some of the crop was not planted on well prepared seedbeds. As well, the quality of the seed was suspect. The Tribunal agrees that herbicide sprays are not as effective if there is too much rain but if this were the case the grower would have to spray again when the weeds are small.

The Tribunal finds that the evidence regarding fertilizer indicates the fertilizer used by Mr. Grima was not the best choice for soybeans and the soil fertility was still poor in Fall 2004. There was no evidence of any soil analysis being done before application, to determine the fertilizer requirements of the fields planted by Mr. Grima.

The Tribunal agrees with Mr. Grima that his fields were not comparable to other lands insured by AGRICORP in the area. Mr. Grima, Mr. Conklin and Mr. Seabrook all indicated that some of the Grima crop was planted on marginal lands. AGRICORP admitted it made a mistake in underwriting the crop and the Tribunal finds that Mr. Grima cannot be penalized for AGRICORP’s mistake.

As well, AGRICORP acknowledged there was some damage done to the Grima soybean crop by deer, white mould and aphids. This was recorded in Adjuster’s Special Reports which were filed with the Tribunal.

Neither party provided the Tribunal with strong evidence as to the proportion of losses caused by insured perils – white mould, deer, and aphids - to the losses caused by uninsured perils – weeds, poor soil fertility, and rough seedbeds. The Tribunal rejects the appellant’s position that 100% of the losses were caused by insured perils.

The Tribunal finds that the yield loss in Mr. Grima’s 2004 soybean crop was largely due to poor farm practices – in particular poor weed control, inappropriate fertilizer application and poor seedbed preparation. The Tribunal finds that damage by aphids, deer and white mould contributed to the yield loss.

Adjustment of Claim

There was conflicting testimony regarding the number of acres of land planted in soybeans by Mr. Grima in 2004. The appellant is required to accurately report all acreage planted. The Tribunal was not persuaded that the appellant accurately reported his acreage. The Tribunal was not persuaded that Mr. Seabrook did him a disservice in agreeing to overlook acreage which Mr. Grima believed he planted in excess of the 500 acres he reported. Estimates of the acreage planted on the Grima home farm varied and no estimates were provided of the acreage of the few fields Mr. Grima indicated he forgot to report. The Tribunal relies on the GPS measurements taken by Mr. Patterson of the fields clearly identified by Mr. Grima as being planted in soybeans to arrive at the acreage planted being between 418.4 acres and 420.4 acres.

Mr. Grima selected the floating price option in his contract of insurance. This was listed as $6.2468 per bushel in documentation submitted by AGRICORP. Mr. Grima does not now have the option of selecting the current soybean price because it is higher. Insurance is paid on the basis of the coverage purchased.

The Tribunal notes that AGRICORP’s offer of settlement works out to approximately 29% of the full payment of the claim, based on a planted acreage of 419.4 acres, an actual yield of 11.4 Bu/acre and the floating price of $6.2468 per bushel.

The Tribunal finds that this was a generous offer, in light of the management problems with the 2004 Grima soybean crop. However, the Tribunal is prepared to order AGRICORP to adjust the claim in the amount of $14,636.50 - the amount of its settlement offer. The Tribunal notes that it was prepared to pay this amount at one time. It made its offer on Dec 23, 2004 and Mr. Grima was required to respond by January 4, 2005. While the Tribunal feels this is sufficient time to consider an offer, it was clear that Mr. Grima, who is relatively new to crop production, felt pressured and bullied.

Decision and Reasons

After careful consideration of the evidence and submissions made, the Tribunal decided to grant the appeal in part for the following reasons:

1. AGRICORP admitted some damage to the crop was caused by insects, wildlife and white mould.

2. With a new client, AGRICORP should have been out to inspect the fields sooner; it admitted to an underwriting error.

3. The settlement offer made by AGRICORP was generous. The Tribunal was not persuaded a larger adjustment was warranted.

Order of the Tribunal

The Tribunal orders AGRICORP to pay the insured, Rick Grima, the amount of $14,636.50 on his 2004 soybean claim.

DATED AT Essex, Ontario this 27th day of April, 2005.