As we head into this year’s winter sowing window, with yet another dry autumn, as well as low – in some cases non-existent – soil moisture, managing risk is front of mind for many.
Just in time for sowing, we’ve also seen multi-peril crop insurer, Latevo, announce its return to the market with tweaks to its policy offerings and another new backer in Lloyds Insurance.
However, the reality is bad droughts, like the Millennium Drought, are more common in Australia’s history than we might have thought.
As we’ve reported on page 13, groundbreaking research is unveiling much worse dry periods than we’ve experienced in the 200-odd years since European settlement.
That includes one stint of 39 consecutive dry years in the 1100s. This research makes the point that we have a false sense of security that we’ve seen the extremes.
So while revenue insurance might help cover one or two bad years, given the policies are worked out on averaged performances across multiple seasons, the premiums will start to become pretty expensive in periods of many consecutive dry years.
Yet, our drought management is still very short term. Be it insurance for one cropping season, fodder supplies that might get us through a year or two, but not a dinky-di 1100s equivalent.
Given long range weather forecasts are highly changeable, and will likely to continue to be, we need to look at what we can control.
This includes an increased focus on the resilience and performance of our soils.
The health of our soils, which includes their ability to capture and retain water, is becoming increasingly important in our ability to remain productive in dry times.
Major General Michael Jeffery is on the money to call for soil to be recognised as a key national asset.
As research into the role soil can play in how we continue to adapt to our variable climate, it will also no doubt reduce the need for avenues such as drought insurance.
Those farmers who are already leaders in soil management are also generally the least likely to need multiperil crop insurance.
So rather than trying to get a multi-peril insurance industry off the ground, we should instead be directing more efforts towards accelerating our understanding of soil’s role.