New push for multi-peril crop insurance

27 Dec, 2012 01:00 AM
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FLAWED research conclusions and government defiance have been blamed for the collapse of important multi-peril crop insurance plans for WA grain growers.

But there was promising news on the horizon as Upper House members Max Trenorden and Philip Gardiner, and Liberal Party member for the South West region Nigel Hallett, returned from a trip to Europe at the start of the week where they took part in a number of meetings with international agricultural crop re-insurers.

Mr Gardiner said as a result of the meetings, the trio found there was much unfounded resistance among government decision makers about introducing crop mitigation insurance into WA.

He said this was also compounded by flawed conclusions contained in reports on multi-peril crop insurance compiled for such governments.

"Meetings by government of the kind which we had last week with international professionals in the industry would have assisted," Mr Gardiner said.

"The implication of these flawed conclusions has serious outcomes for the economic sustainability of both agriculture and small businesses in regional WA towns."

Mr Hallett, who joined Mr Gardiner and Mr Trenorden in Europe, announced that a number of the international crop re-insurers with which the men met planned to visit WA in 2013 to meet with government and the wider grains industry.

"At least one proposes commencing contracts in a small way during 2013 to build an information base about cost of production history, variability and the climatic risk associated with WA grain production," he said.

Mr Trenorden, who will join Mr Gardiner in standing as an independent candidate for the Agricultural Region Upper House electorate in the 2013 election, said the Federal Government's view of multi-peril crop insurance was adversely influenced by the high cost due to the higher systemic climate risk of the Eastern States, as discovered in the European re-insurer meetings.

"This leaves WA growers stranded unless the State Government becomes better equipped to judge the merits of the lesser systemic risk of WA agriculture and encourages the development of multi-peril crop insurance appropriately," Mr Trenorden said.

"Although, the preparation of a carefully crafted insurance program to build on the work of CBH's multi-peril crop insurance product of 2011 will mean the 2014 season might be the earliest possible commencement date of a comprehensive insurance policy offering."

In a statement released by Mr Gardiner and Mr Trenorden the three members said they left the meetings with the view the international crop risk mitigation industry was concerned Australia was one of the few countries in the world which had no measures in place to deal with farmers' exposure to increasing climate variability, given agriculture was the only industry to experience a direct impact from climate.

"Grain crop insurance is just the beginning," Mr Trenorden said.

"As we found, climate risk mitigation insurance can cover climate risk affecting nearly all types of agriculture.

"As the re-insurers noted, serious adverse climatic events are guaranteed to occur.

"Yet government has no management plan in place with which to deal with it, except for supporting farmer exit from the industry."

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