In an industry first, Australian broadacre farmers will now be able to specifically insure for frost and crop establishment failure.
General Manager, Customers for AWB, Ben Fargher, said the new protections were designed in response to feedback from growers who wanted cover for risks that were specific to their business, not pay a premium for a broad basket of perils that were not relevant to them.
“This is why we have made frost and crop establishment failure specific coverages that can be added to the current hail and fire policy,” Mr Fargher said.
“There is increasing awareness of the impact a severe frost at the wrong time can have on an otherwise bumper crop and the financial and psychological impacts of this can be tough. It is equally demoralising and financially devastating when a crop sown dry fails to emerge when the season break doesn’t arrive.
“Not every business is able to take such a significant hit to their annual revenue and most growers we speak with, want to ensure they will be no worse off at the end of the year than at the beginning of the year and will be able to continue business operations as usual,” he said.
Mr Fargher said there has been a lot of great work done over the years by growers and research groups to help manage frost risk. These techniques range from adjusting the planting times to avoid the crop flowering in the high frost periods, to selecting more frost tolerant varieties.
“But it’s fair to say the same level of innovation hasn’t been forthcoming on financial tools to manage the impact of this production risk. We know growers are good at managing things they can control, but want more ways to transfer the risk of things they can’t control, like severe weather events, to another party in the form of insurance. “
Mr Fargher said AWB wanted to make the quoting process as simple as possible for growers by providing a quote for all four perils (frost, crop establishment failure, hail and fire), allowing the grower to select which new add on cover is right for them.
He said many growers found the claim processes stressful and so AWB and its partners have also focused to make this as smooth as possible.
AWB has partnered with one of the world’s largest reinsurance groups to offer this tailored alternative for growers to manage the risks that are typical for their business and their area.
“Together with our partners, we have used our experience in agribusiness to understand the risks at a regional level and so we have been able to accurately price the risk and offer what we believe is an affordable alternative to growers,” he said.