A major risk has emerged for the 2018 harvest season in the grain and cotton industry, as contractors who own grain harvesters and cotton pickers could be struggling to get insurance after April 2017. It’s believed farmers who strip their own crop will not have the same difficulty as the farm-pack insurers will continue to cover the machines.
Reports would have insurance giant Lloyds of London, which provides insurance and reinsurance to most major insurance companies and brokers in Australia, is closing its scheme on these items of machinery from April this year. The company’s loss ratio is more than 1000 per cent, which means that for every $100 it earns it is paying out $1000 in claims costs, clearly unsustainable.
The problem has arisen because of a spate of fires in headers, particularly in the large pulse crop this season in the northern part of the state, with 16 headers burning to the ground mainly from harvesting chickpea crops – four at Nyngan, four around Walgett, seven around Mungindi and one at Warialda. Experienced operators are having problems, with Andrew Henderson – a contractor from northern NSW – saying there were numerous fires contractors had put out, but fuel tanks and wire looms were burnt. Mr Henderson said unless he stopped every hour, after about 10 hectares, and did an extensive blow down of his machine it would catch alight. He said a number of people stopped stripping from 11am through to 7pm at night as it was just too hot and the risk of fire too great.
Premiums on a $300,000 header are about $6000 and excesses have now risen in some cases to 10 per cent of the machine’s value, which means if a contractor loses his machine he would be up for $30,000 in excess payment. With new machines now costing about $800,000 this sum multiplies.
The industry is deeply concerned if this is not fixed next year could be a disaster, with an expectation, depending on weather, of another record chick pea crop – with prices still hovering about $750 per tonne urgent action needs to be taken so there are enough headers to take the crop off.
Crop farmers will plant about 22.3 million hectares in 2018. Contractors will again be heavily relied on and if they are unable to get insurance a major problem will emerge as they will not be able to get finance on their new machines, as financiers will not release funds to these clients until they have received a current insurance certificate.
Clearly urgent action needs to take place where government, manufacturers and Australian grain and cotton harvesting associations need to come together and start looking at installing automatic fire suppression systems as part of their manufacturing/business practices. If industry does not bite the bullet government will need to legislate to make it mandatory that either the manufacturer or an aftermarket fire suppression system such as the one that Wormald and Belle-Vue Trading have developed are fitted as an Australian Standard.
- Mal Peters
