Drought: A Threat to Farmers and Taxpayers Alike

The climate changes exerting pressure on the agricultural sector in Canada’s Prairies not only pose a direct threat to farmers but also have far-reaching implications for Canadian taxpayers. Experts warn that the extreme weather conditions, especially droughts, could lead to increased insurance premiums or burden the budget of some provinces.

Recent years have seen farmers across the country grappling with extreme weather conditions. In Saskatchewan, for instance, last year’s drought severely impacted agricultural production. The drought led to an 11% decrease in production year-over-year, forcing the provincial government to spend an additional nearly 1.2 billion dollars. Looking ahead, Saskatchewan has allocated 431.7 million dollars for risk management programs in the coming year, a 5.8% increase from the previous year. This budget adjustment is in response to the challenging weather and soil conditions faced by some producers.

This financial strain is not a new occurrence. In 2021, Saskatchewan farmers experienced one of the province’s most significant production declines in history—47% year-over-year—due to extreme heat and drought conditions. Similarly, in Alberta, the Agriculture Financial Services Corp paid out 2.1 billion dollars in 2021 and 552 million dollars for the 2022 agricultural campaign, with drought being the primary cause of loss for the majority of these claims.