SEED cleaning and grading business Hannaford has teamed up with farm insurance specialist Celsius Pro to offer growers a rebate program in the event of dry weather during the sowing period.
The novel free product offering, designed to help share the risk with the production sector, will see Hannaford making a payout on seed costs up to $5000 if local rainfall is in the driest 20 per cent of years on record or below.
Celsius Pro chief executive Jonathan Barratt said for every millimetre below a decile 2 event during crop emergence, from May 1 to June 30, Hannaford would pay growers $125 per mm up to $5000 to cover the cost of seed.
"It is a great way for growers to help get some protection against the variable climate we see in many of Australia's cropping regions," he said.
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Drought management has been on the backburner in recent years as farmers across the country contended with a string of La Nina induced wetter than average seasons, but Bureau of Meteorology (BOM) forecasts suggest it will be right back on the radar this year.
Much of the country is a markedly higher than average chance of below median winter rainfall, while in southern regions there is nearly double the normal risk of extremely dry conditions, the decile 2 rainfall required to trigger the Hannaford rebate.
Hannaford commercial manager Brett Heath said the company was looking to provide the cover to help provide certainty for growers.
"You may ask why we are giving away the cover for free, but we feel that by giving growers the certainty they will feel more comfortable deciding to plant extra crop which in turn is good for our business, so we think it is a win-win situation," he said.
Should the payment be triggered it can be used towards a further purchase with Hannaford.
Hannafords are major players in the seed cleaning and treating industry across the country, playing a vital role in preparing seed for growers prior to autumn planting.
Mr Barratt said he felt the concept could be applicable across other types of crop inputs.
"We have not seen big appetites from Australian croppers for multi-peril crop insurance as a standalone but this sort of thing in conjunction with crop input providers could be something that really helps create sustainably managed farm incomes through those tough drought seasons.
"We've seen the cost of crop inputs rise markedly in recent years so anything growers can do to help mitigate some of that risk I think they'd be very interested in it."
He said the Hannaford program would be based on official records from the nearest BOM weather station.
"There were a lot of ways you could work all that out but we thought this presented the best option, obviously rainfall can be variable but this will provide us with workable data."
Gregor Heard
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
