Still slow progress on

28 Nov, 2001 10:00 PM
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A MULTI-PERIL crop insurance scheme (MPCI) will not be available to WA graingrowers next year as previously thought.

MPCI taskforce chairman Ross Bowe said the $2.5 million feasibility study was behind schedule and would not be in place for the 2002 season.

WA Agriculture Minister Kim Chance is also not expected to receive the final analysis of the plan by February 2002 as requested.

To date only one progress report has been submitted to Mr Chance.

Mr Bowe said the delay was due to the complexity in creating a commercially viable scheme attractive to both farmers and the insurance industry.

According to Mr Bowe, ultimately it was the insurance industry which would decide when and if a scheme would be launched.

In another blow, doubt has been cast over the creation of a commercially viable scheme in the near future due to the September 11 US tragedy which rocked the insurance industry.

Mr Bowe said the event had impacted on the level of re-insurance that could be absorbed by the insurance industry, which reduced the chance of a re-insurer taking on the total risk of the WA wheat crop.

Although concern has been expressed over lack of progress, the MPCI taskforce has not been deterred by set-backs and is committed to exploring all options.

The study has investigated insurance models based on weather derivatives, weather triggers, yield triggers, yield, an American model, a recent national study and a cost of production broad-based model.

Mr Bowe refused to indicate which model was favoured by the taskforce and said all were being investigated.

However, since the taskforce's inception in August, the Macquarie Bank has launched a crop insurance product based on weather derivatives, which Mr Bowe said the taskforce would seriously look at.

A yield trigger model would also be investigated, which was area-specific. These areas were Dalwallinu, Merredin, Jerramungup, Wongan Hills, Katanning, Kulin and Dandaragan.

A US model is also to be explored with the help of an American expert who will meet with the taskforce next month.

However, even at this stage, Mr Bowe believes the American model was unlikely to be acceptable because it was heavily subsidised by the government.

In commissioning the feasibility study, the WA government specified only a "commercially viable scheme" would be acceptable, as they would not provide any subsidies.

Although Mr Bowe said he was optimistic about the study, he acknowledged the fact that "most, if not all, MPCI schemes around the world were heavily subsidised by government".

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