A better way to manage weather risks

"The government's response to the ongoing drought has been deeply lacklustre," he said.

"Farmers have been suffering through drought for the past two years with government assistance that is reactive, and too little-too late.

"Conventional wisdom in international development is that every dollar spent on insurance is equivalent to six dollars spent in recovery aid spend after disasters strike.

"Why does conventional crop insurance cover only fire and hail, but not risks that most impact farmers like drought, excess rain, frost and heat stress?

"This is at odds with our global peers, where multi-peril crop insurance (MPCI) is more common.

"Countries like the US subsidise half the cost of crop insurance premiums.

"It is consistent with what farmers are telling us - the prices, payoffs and risk coverage of existing products are not what they need.

"Weather insurance is a long-neglected drought risk management tool in Australia.

"MPCI, farm income protection policies and weather certificates or derivatives are all readily available overseas.

"These provide farmers with peace of mind when weather disasters strike as they can pay their employees, cover their costs and plan for the next season."