CHRIS Moore, Head of Grain at Westpac Agribusiness in WA, said his company believed the introduction of CBH’s new crop insurance product would help provide farmers with more tools to manage their risk and assist with strengthening their balance sheets over time.
Mr Moore was a member of the WAFarmers Risk Management Committee which worked with CBH, WAFarmers, politicians and farm consultants to develop the new insurance program.
He said the product would enable farmers to protect against downside risk and recover part or all of their variable input costs in the event of significant crop failure caused by natural factors such as rain, fire, flood, pests and others.
Mr Moore said the cost recovery component of the scheme would protect growers against equity degradation and provide the capital needed for year two plantings.
He said if the 2011 pilot program proved to be successful, Westpac envisaged the product could well be commercially viable to be expanded nationally.
“For farmers who have demonstrable ongoing viability, use of this style of product will help protect against erosion of their equity in the event of a significant drop in yield or production,” he said.
“The (increased) confidence would be the certainty of their year two position.”
Federal Independent MP, Tony Crook, welcomed the new Multi Peril Crop Insurance scheme, saying it would provide great relief to the WA farmers who had done it tough for the last few years.
Mr Crook said establishment of a MPCI scheme could reinvigorate those farming communities who have struggled in previous years due to the drought.
“It is great to see a commercial product entering the market to address the needs of WA growers,” he said.
Mr Crook also acknowledged Nationals colleague and WA Agricultural Region MLC, Philip Gardiner, for his dedication in establishing a MPCI scheme, as well as the work of CBH and WAFarmers.
“Philip Gardiner has been espousing the benefits of an MPCI scheme for years, and as a member of the WAFF Risk Mitigation Committee he has been one of the driving forces behind this development,” Mr Crook said.
Mr Crook said the initial program would be on a small scale but if successful it could expand in coming years which would be “a great outcome for our WA farmers”.
“I believe this scheme could lead to some very positive developments for Australia’s agricultural industry,” he said.
“It will also give farmers some certainty.
“This will lead to more sustainable and secure farming, especially for the young farmers seeking to make a profession in broad acre agriculture.”
Mr Crook said he had long been supportive of establishing an MPCI scheme; he also praised WA Agriculture Minister, Terry Redman, for his supporting in developing the insurance package.