Australia’s National Rural Advisory Council (NRAC) has presented a report on agricultural insurance to the Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig.
NRAC’s report, The Feasibility of Agricultural Insurance Products in Australia for Weather-related Production Risks, is intended to aid ongoing discussions on drought reform.
The council 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.
NRAC found that multiple-peril crop insurance options are not currently commercially viable in Australia and are unlikely to be viable in the absence of a high and continuing level of government subsidies.
The report also found that index-based insurance products may have more promise.
There is 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 programme, 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.