![WISE INVESTMENT: Graeme Auricht, Pinnaroo, says frost insurance has paid off in recent years, when up to 80pc of his wheat was lost. WISE INVESTMENT: Graeme Auricht, Pinnaroo, says frost insurance has paid off in recent years, when up to 80pc of his wheat was lost.](/images/transform/v1/crop/frm/Fuxf4VmvfUmd225xeYC69T/2dcbb5e1-5397-4d7d-a240-0af7e1ef3a02.jpg/r0_0_4000_6000_w1200_h678_fmax.jpg)
TWO leading grain industry representatives say without government support, multi-peril crop insurances are unlikely to gain traction in the foreseeable future.
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Last year, Grain Producers Australia chair Andrew Weidemann said the MPCI sector was in trouble and while that was still the case, it was unlikely there was any will to support it.
"Because it has rained on the east coast, and because of other pressing issues taking precedence, it's unlikely to be on the agenda," he said.
"It's pretty obvious the federal government has not intended doing anything in this particular space."
Mr Weidemann said a number of companies had tried MPCI but had not been able to continue to bring products to market.
But, considering the large amounts of funding going towards drought support, he said there was potential to look at supporting farmers another way, such as through helping them manage their risk.
Mr Weidemann said the high potential payouts for insurers needed to be underwritten - either by a large pool of clients, particularly those from areas with less risk, or by the government - to make them sustainable.
He said there were other commercial alternatives, such as weather derivatives, which hedges the risk of a weather-related loss, that had been in place for more than a decade and could be a viable option if forecasting and weather stations improved.
"It's hard for a company investing in Australia to get good data," he said.
Mr Weidemann said farm insurance choices were generally made in June or July.
"(Farmers) feel more confident about where they are," he said. "But that doesn't help the insurers who probably want information in March or April."
RELATED READING: Stamp duty on MPCI removed
Ahead of last season, the state government followed through on its election promise for stamp duty exemptions on MPCI, with the main emphasis on policies covering drought.
But Grain Producers SA president Wade Dabinett said this was unlikely to prompted many people take up policies.
He said the high cost, and reduced availability, of MPCI meant many farmers were looking at other options.
"The stamp duty exemption needs to be widened," he said. "We've probably had blinkers on when we talk about mitigating risk with MPCI. Unless there are some subsidies from somewhere, it's not viable."
Instead, he said many people were looking at other options, such as frost or rainfall insurance.
"These are on the edge of affordability and with something like stamp duty exemption, it makes them attractive and plausible," he said.
Mr Wiedemann said frost was one of the biggest issues for farmers, aside from drought.
"It can have more of an impact since it comes after all the inputs are spent, whereas drought, you probably know earlier," he said.
The SA government was contacted for comment.
Frost risk planning pays off in Mallee
PINNAROO farmer Graeme Auricht says he is open to using multi-peril crop insurance options to cover his crops, but when he has considered them, the rates have been too high.
Instead, he sees frost as his biggest risk, and has invested in frost insurance.
"It's not a get-rich quick scheme, but it does give us a bit of assurance," he said.
"You can have a bit of confidence to go and sow the crop, knowing you've got back-up."
Mr Auricht said frost insurance came with its own high price tag and there was a point where the cost did not make it viable, but he was glad he had made the investment.
"It certainly paid of the past couple of years," he said.
He said in the 2019-20 harvest, as much as 75 per cent to 80pc of their wheat was lost through frost.
"The previous year was about the same," he said.
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