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Multi-peril crop insurance – a risk management option worth considering

by Grain Central, 06 December 2017

AT a time when difficult seasonal conditions are raising the spectre of harvest losses and downgraded quality, national grain farmer representative body, GrainGrowers, continues to dialogue with major insurers on the issue of adequate farm risk management options.

GrainGrowers CEO David McKeon said it was a major setback for many farmers that the latest widespread rainfall across eastern Australia would result in production losses and quality downgrades for unharvested grain crops.

“Low growing season rainfall, combined with rainfall during harvest – including more than 100 millimetres of rain for many southern NSW and central Victorian farmers over the past few days – will deliver some grain growers disappointing results this year,” Mr McKeon said.

“With farm budgeting for follow-on crops top of mind for most farmers over the next few months, we want to ensure all farmers are aware of the suite of risk management tools that are potentially at their disposal, including Multi-Peril Crop Insurance (MPCI) options.”

Mr McKeon said MPCI was just one risk management tool of many which grain farmers could use to insure their businesses against the risk of possible crop losses and reduced income streams caused by a range of weather events.

He said the results of a GrainGrowers’ member survey about MPCI earlier this year showed that a lack of information about, and understanding of, the available insurance policies and companies was a contributing factor in low uptake among grain farmers. Another was the view of farmers on the cost of premiums.

GrainGrowers released a report highlighting the available MPCI options earlier this year. The organisation plans to produce an updated version in 2018.

“The report, ‘Managing risk using Multi-Peril Crop Insurance’, was originally released mid 2017 by GrainGrowers to raise awareness of the range of MPCI products on the market and to provide a checklist of features growers should look for in comparing one product with another,” Mr McKeon said.

“Our goal is to inform farmers about the types of product on the market, the application process and associated costs. We plan to update the report before the planting of winter crops with the offerings available at that time.”

Mr McKeon emphasised that GrainGrowers was certainly not advocating MPCI over other risk management options.

“We are only asking that growers consider it as one tool of many which might suit their particular circumstances and requirements.”

The booklet includes details of the Federal Government’s Managing Farm Risk Programme, which offers a $2500 rebate for advice and assessments to help farmers prepare and apply for a new insurance policy, and of other government initiatives in this area.

“For those growers who are intending to take out MPCI next year, we encourage them to keep an eye on close off dates for applications. These are usually early, and can be at the time of harvest or before sowing of the next crop is complete.”

Download the report here: www.graingrowers.com.au/policy/resources

Source: GrainGrowers

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