Farm Products

Subsidies needed to make agricultural insurance viable

A RESEARCH report on the feasibility of agricultural insurance products has found multiple peril crop insurance options are not commercially viable in Australia and are unlikely to be in the absence of a high and continuing level of government subsidies.

The National Rural Advisory Council today presented its report to the Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig.

The council said the report, Feasibility of agricultural insurance products in Australia for weather-related production risks, would aid ongoing discussions on drought reform.

NRAC consulted widely with key industry stakeholders, drawing on past and present experiences of agricultural insurance in Australia and overseas, including the Australian Bureau of Agricultural and Resource Economics and Sciences' analysis of options for insuring Australian agriculture.

The report also found index-based insurance products may have more promise.

NRAC also found there was a role for government in assisting Australian agricultural industries to become more self-sufficient and better manage weather-related impacts on production through accessible and user-friendly climate data.

The report was produced as part of NRAC's new work program, commissioned by Minister Ludwig in July 2012.

NRAC's future work program includes assessments into the effectiveness of the Farm Management Deposits Scheme and the workforce planning capabilities of Australia's agricultural employers.

Topics:  drought flood

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