Role of farm income protection in drought plan debated

Role of farm income protection in drought plan debated

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Whether or not climate risk insurance can help farmers manage periods of drought was a hot topic at a recent Horsham meeting.

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Can farm income protection help farmers manage droughts?

Can farm income protection help farmers manage droughts?

DISCUSSIONS at the recent Horsham consultation meeting on the Federal Government's drought resilience plan suggested there are still mixed opinions in regards to the role farm income protection, such as multi-peril crop insurance (MPCI) can play in Aussie ag.

Whether or not MPCI and similar products should feature within the resilience plan, which is separate to ongoing drought support, was a keenly contested topic at the meeting.

Darryl McCrae, founder of farm insurance business Sure Season said some form of a farm income protection product would see more confident investment right through the agricultural supply chain.

He said governments of all persuasions had failed to truly get a grip on the benefits climate risk based farm insurance could deliver agriculture.

Tim Fisher, assistant secretary for water policy with the Department of Agriculture, said he was sceptical whether a form of MPCI would be the panacea for Australian agriculture some suggested and pointed to low uptake rates.

"Something like a farm management deposit allows farmers to essentially self-manage the risk of bad years, although it is used more for tax mitigation these days."

Mr McCrae said there had been a number of constraints which had prevented numbers of those taking out insurance building to a critical mass and that he believed a viable and vibrant insurance sector could be built.

He was backed up by Warracknabeal farmer David Drage, who said he had used MPCI in the past and that it had been critical in allowing him to manage a run of dry seasons.

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