Insurers develop 5-point plan to assist drought-hit farmers

The Insurance Council of Australia is set to raise its five-point plan for helping drought-affected farmers at the prime minister’s drought summit this week.

ICA CEO Rob Whelan said improving outcomes during droughts or following extreme weather requires government support to encourage the take-up of crop and farm-income insurance for primary producers.

“The abolition of stamp duties for agricultural-insurance products is one of five measures that insurers believe would help primary producers in times of drought and protect an important sector of the economy,” Whelan said.

In addition to scrapping what Whelan described as “unfair and highly inequitable” state taxes and levies on agricultural insurance products, ICA will also propose:

• running a census on every primary producer to collect and publish critical data, to support underwriting of existing covered crops and expansion into livestock and non-cereal crops;
• introducing tax reductions or offsets for farm-income and crop-insurance products, to help encourage take-up of these products and ultimately reduce dependence on government support;
• establishing a government-guarantee facility for insurers offering farm-income and crop insurance for 25% of losses at the declared 1:60 to 1:100-year drought, to help them maintain reinsurance cover in the global market; and
• changing government-lending criteria through the Regional Investment Corp. (RIC), to one that is dependent on the primary producer holding adequate farm-income or crop cover.

Whelan said any stamp-duty concessions on insurance introduced for the agricultural sector should also be quickly made available to the whole community.