Assessment of multi-peril crop insurance

This week, along with Grains Committee Member Dan Cooper, I attended a public hearing held by the Independent Regulatory and Pricing Tribunal (IPART) as part of its assessment of multi-peril crop insurance (MPCI) under its drought assessment framework.

As part of its assessment, IPART found that MPCI has a roleto play in assisting grain farmers to increase their sustainability and selfresilience in the face of climate variability and drought, but importantly, ina holistic view of drought policy, IPART’s draft report also found that thereare limitations to the benefits of MPCI, finding that it will not displace theneed for farmers to access other forms of assistance, particularly during aperiod of drought.

NSW Farmers has welcomed these findings, reaffirming thewidespread industry view that we need many tools to tackle the problems droughtcreates for farm businesses, the wider economy and importantly to the fabric ofour rural communities.

In assessing options for the consideration of the NSWGovernment, IPART has developed and assessed a five year program offering anupfront subsidy program for MPCI policies. This program would provide a 50% rebate to farmers up to $30,000 perfarm in its first two years before reducing to a 25% rebate capped at $15,000per farm for the final three years of the program.

As part of IPART’s assessment, NSW Farmers has proposed thatfurther investigations should also assess the opportunity for the Government tolook at other interventions that may result in a lasting reduction in thestructural cost of MPCI policies, with the estimated cost of administrationaccounting for up to half of the cost of MPCI premiums.

NSW Farmers will continue to work on the issue of droughtpolicy and the role of MPCI so that we can continue to work towards a droughtpolicy that will provide lasting fundamentals for the benefit of farmers andrural communities.

Sonia O'Keefe
NSW Farmers’ Rural Affairs Committee Chair

Contact: NSW Farmers

Phone: 1300 794 000

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