Rain results in cover rethink

30 May, 2011 04:00 AM
KUNUNOPPIN farmer Peter Waters was one grower who considered taking up CBH Mutual's program, as did a number of his neighbours.
KUNUNOPPIN farmer Peter Waters was one grower who considered taking up CBH Mutual's program, as did a number of his neighbours.

THE CBH Mutual Cost of Production program's May 20 deadline is up and growers who applied for have been offered and accepted their favoured cover options.

But CBH enterprise risk and compliance manager James Lynch still couldn't tell Farm Weekly how many growers had taken up the cover, at what level most applicants were covered and what percentage of wheat and barley crops were covered throughout the State.

He did say the initial applications were set to cover about 70,000 hectares but CBH Mutual always expected the number to change through the subsequent offer and acceptance period.

As expected the increase in grower confidence from the recent widespread rains resulted in a percentage of growers selecting not to progress forward with the cover.

"Obviously fewer hectares will be now covered by CBH Mutual for the coming season," he said.

"The areas covered are throughout the Wheatbelt."

Mr Lynch also said other aspects of the cover were either commercially sensitive or CBH Mutual wished to protect the confidentially of its applicants.

"We will not be providing any further specific details," he said.

Despite his willingness to protect the identity of growers involved with the cover he said feedback from growers had been very positive, including that the product was innovative and reasonably priced.

Growers also expressed they were happy to have the product available.

"And as I said before, applicants have said that the recent widespread rain has provided an increase in confidence in the season and they have selected not to proceed to the acceptance and payment stage for this year but would look at the product again for the following season," he said.

Mr Lynch said as with any risk mitigation or insurance-type products the benefit to growers would be immediate for successful applicants in reducing risk and providing peace of mind for the season ahead.

The remainder of the season would determine any direct financial benefit to growers as a result of a claim.

He said whether or not growers needed to make a claim, those who obtained the cover would have ongoing confidence knowing they had the protection in place.

Mr Lynch wouldn't confirm whether CBH Mutual expected to receive more applications than what were actually received but said the product was being trialled in response to the long-standing grower requests for a multi-peril risk management tool.

"This is a new and unique product and it was always going to be difficult to estimate what sort of response and take-up there would be in the first season," he said.

"That is why we have described this as a trial.

"We are very satisfied with the number of applications and it is completely understandable that due to the recent rains a percentage of applicants have declined to pursue with the product for the current season because of increased confidence in the season."

He said there were only a very small number of applications which didn't progress due to the information supplied being incomplete and the vast majority of applicants who wished to proceed were successful in being offered cover.

Any claims for cover need to be made by January 31, 2012 and the payout of any successful claims will take place by April 30, 2012.



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