Major spotlight on risk management

06 Apr, 2018 04:00 AM
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Windsor Hart co-director and north Merredin farmer Jules Alvaro, explained the concept she has in place for crop insurance in marginal years.
Windsor Hart co-director and north Merredin farmer Jules Alvaro, explained the concept she has in place for crop insurance in marginal years.

RISK management across a farming business isn’t always manageable, but industry professionals offered some assistance on the matter at the Inspire Summit 2018, Perth, last week.

The panel discussion included Bedbrook McCarthy director David McCarthy, north Merredin farmer and Windsor Hart co-director Jules Alvaro, Plumgrove marketing and communications manager Rikki Foss and Wyening Mission Farm partner Ruth Young.

Mr McCarthy, who took to the podium to discuss the importance of insurance on-farm, said that different generations would require different levels of insurance, including life insurance.

He said one part of a farming business was dealing with insurance and how to cover off and help protect families for a tragic event when it might occur.

Mr McCarthy said the four main sections on insurance were life insurance, total and permanent disability insurance, trauma insurance and income protection which isn’t commonly used on farms.

“There are changing requirements of covering insurance, and the final order is the financial position of the business which changes from year to year,” Mr McCarthy said.

His final message was that all policies intermingled and all farming businesses would need some form of personal insurance to protect the family group.

“Taxation, superannuation, and ownership of the entities all have to be taken into consideration, and getting advice from accountants, lawyers, financial planners and insurance agencies all play a part in developing the right insurance plan for you,” he said.

Crop insurance was also on the cards with Ms Alvaro talking through her operation and what strategies she had in place on her marginal cropping land.

“Our effective rainfall on our property over the past 20 years is 208 millimetres for the growing season,” Ms Alvaro said.

In 2017 she used a consultant who went through and used their grid of rainfall data from the Bureau of Meteorology over the past 100 years and used that against their own rainfall records.

“The insurance company has the data as well and they needed to see that we were insurable – they needed to know what their risk category was as well,” she said.

With the use of weather probes and data records, on low rainfall years, Ms Alvaro can prove that they haven’t had sufficient enough rainfall and are able to claim back some of the losses.

She said there were different insurances for different situations and people in the Great Southern could gain some form of frost insurance if they could prove a constant weather pattern with below zero temperatures that could impact a crop.

Although Ms Alvaro warned that weather data collection on-farm could be expensive to set up, but in some circumstances can help farmers in the long run.

Another risk that farming businesses take is the marketing of their grain throughout the year.

Ms Foss who has worked in the grain industry for 20 years and is currently working at Plumgrove, gave the room three simple steps to marketing their grain.

“There are three rules of marketing – one, be prepared for opportunities, two, know what numbers work with your budget and if we are selling for a profit and three, have confidence in pulling the trigger and don’t look back,” Ms Foss said.

She said she couldn’t always predict what the market would do and her advice was to know the price required and lock it in once there was a profit.

Even if the profit is one dollar a tonne over your budget price, Ms Foss said if farmers waited for it to go up a few more dollars, it was a gamble and the prices might also go down.

“Once you lock the price in you can’t look back and say what if, just know that you will be profiting from that price,” she said.

“I have a very balanced perspective of my plan and sometimes we need to step away from that emotional roller coaster of seeing the crop in the paddocks and put a balanced plan in place for your marketing.”

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NO ships with live animals should be leaving Australia. This industry is animal abuse and animal
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we are happy to have Aldi in katanning doing business with WAMCO we also wanted and in great
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This is a disgrace but what can you expect from a Liberal Government that insists on making