FARMERS may soon find themselves mitigating risk through some form of farm income protection product or face the prospect of having difficulties in getting finance.
This was the view of multi-peril crop insurance provider Latevo Farmers Mutual chairman Jeff Herdegen.
"Early next year when growers are seeking loans to finance their 2020 season, they may find themselves regretting the decision to not mitigate against risk with crop income protection."
"The concern is that growers who don't take up crop income protection are leaving themselves exposed to more than just the risk of crop failure."
Mr Herdegen, also a director of Wangaratta-based lender Winsec, said lenders wanted to see farmers actively manage risk.
"We won't lend money to growers who don't protect themselves against risk and I have to question the advice given to growers by their advisors and consultants who discourage growers to take up crop income protection."
Meanwhile, MPCI businesses are still hunting up business this year in spite of the poor season.
Founding director at Latevo Andrew Trotter said his organisation was closing its final product, for frost protection, a new product for Latevo, next Friday (September 6) across Western Australia, South Australia and Victoria.
"Given the week we have just had, with heavy frost across many centres you can see the potential for further frost over the spring so it would make sense for farmers to remove some of that risk," Mr Trotter said.
While he said he was pleased at the traction Latevo Farmers Mutual was getting, Mr Trotter said he was frustrated at the continual roadblocks put up in front of the multi-peril crop insurance (MPCI) sector in Australia.
He backed up Mr Herdegen's comments, saying he felt misinformation about how MPCI products worked that had hindered uptake among Australia's grower community.
"There has been comment about the price of the products and how it is too expensive, which I just don't accept at all."
Mr Trotter said the industry had evolved over the years to better reflect what growers wanted.
"We relaunched Latevo this year as a mutual, which provides growers the chance to step outside a traditional insurance model and take ownership of the risk to their crop income."
Members of the farming community say MPCI is essential not just for agriculture but for the flow-on impact on rural communities.
Tintinara farmer and mental health advocate David Head said it was not just farmers that felt the pinch following a poor season.
"After a drought local businesses are carrying farmers, but they can't afford to do that anymore," Mr Head said.
"We have to protect our own business, what gives us the right to expect them to carry us all the time when we can protect ourselves?"
Many sceptics have said they do not believe MPCI can be viable without government intervention, however, Mr Head said he wanted the MPCI sector to support itself rather than rely on government funding.
"We can't expect the government to help us, because they won't. By the time they get to us, we're dead and gone."