FARM income protection is back in the spotlight, with state farmer organisations looking at all options to mitigate climate risk in the wake of a wave of serious drought events across the country in the past five years.
NSW Farmers will hold a forum in Sydney tomorrow (Thursday) specifically on climate risk management, with income and crop protection insurance both key topics.
Similarly, the Australian Farm Institute (AFI) next month will run a June conference on the topic of farming in a risky climate and the keys to managing those risks.
The resurgence in interest in climate risk management comes in spite of assertions from the recently re-elected government prior to the election it would not subsidise farmer multi-peril crop insurance premiums.
Last month agriculture minister David Littleproud said at a forum in Tamworth, in the heart of drought-stricken northern NSW, that while the government supported the concept of multi-peril crop insurance (MPCI) it could not afford to effectively subsidise large multi-national insurance giants.
In the time since at least one player in the small-scale Australian MPCI sector, Latevo International, has become a grower-owned mutual, Latevo Farmers Mutual, so any profits accrued in years with low claims will flow directly back to growers.
NSW Farmers grains committee chair Matthew Madden said the renewed focus on risk management reflected the thoughts of members.
"Many of us have been through a tough time in the past five years, and we want to look at ways of managing that risk.
"The last time we looked this seriously at MPCI and other forms of income protection was probably in 2014, and that's five years ago now and technology and systems have really improved.
"You can see climatic risk protection is something all of agriculture wants, GrainCorp is looking at implementing a weather derivatives based crop size protection, it is something that is progressing."
He said a workable income protection sector would take a weight off growers' shoulders.
"Instead of having to self-manage through dry periods they could use products to keep things stable."
He said the key to any farm production insurance sector developing, and the reason only a tiny minority of Aussie farmers currently used MPCI was critical mass.
"Getting that critical mass and getting it spread right out evenly across the country is the thing that will allow this to take off, you can't have one product that is really popular in just one area and then when they are hit by drought the insurer is faced with a massive pay out from a low earnings base."
"There is still a bit to be worked out, but we think it is going to be important into the future, especially if the climate becomes more variable."
The story Farm sector focus turns back to climate risk management first appeared on Farm Online.