IT MAY now seem an unnecessary expense, given the season turned out to be a record-breaker, but Wimmera farmer Bernard Lindsay said he was pleased he took out multi-peril crop insurance (MPCI) prior to planting.
“We had come off two very dry seasons and the autumn had also been dry,” he said.
“I have recently expanded the business and I don’t want to risk being exposed to a total production failure, so MPCI made sense for me.”
However, contrary to commentary from some industry players, Mr Lindsay said he did not think MPCI would become an automatic part of the planning process for all grain growers.
“The products out there will suit some farmers and their situation but others may look at other ways of managing risk.”
Mr Lindsay said as his business was growing, he could not afford catastrophic losses so insurance was a good option.
“Some people may have low debt levels and be able to ride out the drought or they may choose to risk manage by off-farm investments or whatever but when you are expanding the farm, I think it is wise to have something in place.”
Despite assurances from those offering MPCI products that costs were competitive, Mr Lindsay said he felt the price of the insurance was still on the high side.
“You’d hope it would come down as more farmers take out policies, but at present I feel it is certainly expensive enough.”
“There are different grades of cover, with some of more comprehensive products working out at up to $35 a hectare or you can get other products that don’t cost quite as much but with less cover.”
“It may only be the price of a spray or something like they say, but when it is across all your cropped acres it certainly adds up.”
Mr Lindsay said a welcome development in the market was the range of different players.
“It is good, you can customise what you are insuring against a little better now.
“Some policies work on target yields, others on insuring cost of production, whereas for us, we wanted to protect income and that is what we have been able to do this year with a policy with Sure Season.
“The previous year we had trialed another product with another business but we found it did not cover enough.
“We had a pretty severe drought but we found we did not get as much back as we would have liked.”
Mr Lindsay said a Federal Government rebate to help people had been useful in assisting him in making his decision as to which policy to take out.
The rebate was to cover half the cost of advice relating to MPCI, which Mr Lindsay used to get advice from a private farm consultant.
“The rebate was not a massive sum in the overall scheme of putting the crop in, but it was certainly helpful in working through the process.”