1. About Agriculture and Agri-Food Canada’s AgriInsurance Program.
Crop insurance has been available in Canada in various forms since 1935 as a business risk management (BRM) tool and continues to evolve and adapt to farmers’ needs. The current crop insurance program, AgriInsurance, is part of Agriculture and Agri-Food Canada’s (AAFC) suite of business risk management (BRM) programs. It is a federal-provincial-producer cost-shared program that stabilizes producer income by minimizing the economic effaces of production losses caused by natural perils such as flood, drought and disease beyond the control of producers. AgriInsurance is a statutory transfer program under the authority of the Federal Income Protection Act (FIPA).
AgriInsurance Is the largest of the BRM programs, comprising about two-thirds of allocated funds. In 2021-22, government premium contributions were approximately $1 billion. This has been relatively stable over the last 10 years. Federal and provincial governments and program participants cost-share premiums to ensure affordability of coverage for producers (generally, 36% federal, 24% provincial and 40% producer). Governments also fully cost-share the administrative costs of the program (60:40 federal-provincial).
Producers must proactively buy insurance before an agricultural product is planted or before any damage is possible. When a producer’s production falls below their guaranteed production, they are compensated. Each province maintains an insurance fund account (funded by premiums) to pay indemnities to insured producers and to pay the premiums for any private reinsurance agreements.
Considerations
? Scientific evidence supports that Canada’s climate has warmed over the last century and is projected to continue to warm in the 21st century.
? The crop insurance sector recognizes that climate change is creating more weather volatility and an increase in extreme events, which in turn will impact crop yields.
? The AAFC Minister’s Mandate Letter committed to “working with provinces and territories to update business risk management programs, including to integrate climate risk management, environmental practices and climate readiness.”
? Beginning April 1, 2023, a new federal-provincial programming partnership came into effect, the Sustainable Canadian Agricultural Partnership (Sustainable CAP).
? During negotiations of the Sustainable Cap, the following was accomplished:
- Climate change is reflected in BRM program principles:
- The parties committed to collaborate and seek opportunities that encourage producers to adopt climate risk management and environmental practices where appropriate within the BRM programs:
o “Programs should help mitigate a broad range of risks, including climate risks, by allowing for increased or enhanced environmental stewardship and improved food safety and quality”
o “Farming practices that reduce production risk, including the ones that are beneficial or not detrimental to the environment, shall be promptly recognized in premiums”
- The Parties agreed to conducting a BRM climate risk review.
? The main issues facing the AgriInsurance program are how to maintain or increase revenues, decrease costs and/or reduce risk to keep crop insurance sustainable as the climate and risks to crop production change.
2. Objectives
AAFC’s objectives are to gather information through this RFI to identify expertise to model different crop yields under different climate change scenarios and to assist AAFC in developing a business case, including:
- Determining whether to proceed with a requirements/strategy as planned, and if so, further develop internal planning, approval and solicitation documents that may potentially lead to a solicitation;
- Becoming a more "informed buyer" with an enhanced understanding of industry goods and service offerings in the area of interest; and
- Assessing potential alternative solution concepts that would meet its requirement.
3. Scope of work
The scope of this RFI is to gather details on expertise involved in modelling Canadian crop yields under different climate change scenarios and how the modelling operates. For crop insurance analysis, AAFC is particularly interested in simulations of yield and yield volatilities under different climate change scenarios, ideally recognized by climate change experts. Information in the RFI to include, but is not limited to:
- Type of model (e.g., probabilistic, stochastic);
- Crops that are being modeled or can be modelled, including data sets being used and extent of data sets;
- Spatial and time scales being used;
- Climate change scenarios being used;
- Algorithms and technologies involved;
- Outputs generated (e.g., maps, charts, or other data) and publications; and,
- Cost estimates (including any hardware or software or licensing requirements).
These tasks and deliverables are minimum requirements for this RFI. When responding to the RFI, the Supplier can also provide information to better inform AAFC of options that may not have been considered.
