Farm income protection insurance, sometimes also known as multi-peril crop insurance, is a key risk mitigation tool available to farmers to manage the risk of climate and other perils.
For some farmers, this product is the most important line item in their annual budget, equivalent in some cases to the cost of a summer crop spray.
Over the past four years, NSW Farmers has been working with government and industry to identify how a modern farm income protection insurance market can be developed for NSW and Australia.
We strongly supported the recommendations of a 2017 Independent Pricing and Regulatory Tribunal report, which recommended government support to establish an insurance market, including rebates for farmers who take out premiums.
Ahead of the election, NSW Farmers is calling for a commitment of $40 million to develop a proper risk insurance market in Australia.
In addition to a rebate as recommended by IPART, NSW Farmers is calling for NSW to take the lead and work with other states and territories, and the Commonwealth, to implement a national tax incentive scheme to keep premiums affordable.
There is also a need for greater education about farm insurance products – not just amongst farmers, but amongst the insurance industry, banks and other parts of the rural economy. Developing a risk insurance market is critical for regional communities – it will help us balance the bad times and keep our rural communities strong.
Evidence of the need for a risk insurance market is all around – from failed crops due to a lack of rain, to otherwise viable crops destroyed at the eleventh hour by frost.
Farm income protection insurance can provide an important financial backstop to assist the farmer through the bad – and the good – times.
- James Jackson, NSW Farmers’ president.
