The release of the 2019 GrainGrowers Multi-Peril Crop Insurance (MPCI) report has found the Australian MPCI and drought insurance market is in disarray with providers exiting the market. GrainGrowers is calling on political parties to address the market failure that exists in this insurance market.
MPCI products have the potential to protect Australian farmers against crop yield and revenue losses by enabling farmers to insure against a range of risks including droughts, frosts, pests and prices. Income protection products are an important tool for Australian grain farmers as they prepare for and manage challenging conditions. The MPCI market is in its infancy in Australia and is yet to reach critical mass.
GrainGrowers has identified enhanced climate resilience and risk management as a key election priority for the grains sector. The 2019 MPCI report release emphasizes the need for political parties to support the GrainGrowers election ask of a temporary 150% tax incentive on MPCI and weather insurance premiums for five years. A tax incentive reduces the cost of insurance to growers and also encourages advisors and accountants to support their grower clients in considering the appropriateness of MPCI for their businesses.
Ian Gourley, a grower from Narrabri, NSW took out MPCI in 2018 for the first time. “I was looking at a way to remove some of the production and financial risk we were subsequently building into our business through new-leased land. Taking out MPCI has made planning for the future clearer, especially with our bank.” Gourley said.
In recent years, the GrainGrowers MPCI report has included a product review. This could not be included in the 2019 report due to the lack of product availability. Federal government intervention is urgently needed to help build a sustainable MPCI and drought insurance market in Australia.
GrainGrowers 2019 Multi-Peril Crop Insurance report can be downloaded from the website. Read more about the GrainGrowers Federal Election priorities here.
