MPCI scheme to face rehabilitation

MPCI scheme to face rehabilitation | Insurance Business Australia

MPCI scheme to face rehabilitation
Changes are being considered to revive the federal government’s struggling $29.9 million farm risk management initiative.

Two years since its launch, the Multi-Peril Crop Insurance (MPCI) farm business assessment program, which allows individual farmers to seek a $2,500 grant to help meet the $5,000 cost of being assessed on their suitability for MPCI, continues to suffer from low uptake.

Described as a “sad joke” by shadow agriculture minister Joel Fitzgibbon, the scheme – which was first announced in the Coalition’s Agricultural Competitiveness White Paper in 2015 – has only paid out $107,000 to 48 farm businesses, and spent some $40,000 for advertising the program.

“This in another example of poor policy development and program design under (Agriculture and Water Resources minister) Barnaby Joyce’s watch,” Fitzgibbon said of the scheme in a Queensland Country Life report.

While the government does not intend to subsidise insurance companies to help establish MPCI, it is now considering consulting with grain industry groups on how to use the remaining funds in order to serve the risk management intent of the four-year program, while being able to meet any ongoing demands of the original insurance assessment rebates, the report said.

Daryl Quinlivan, Department of Agriculture and Water Resources secretary, told the senate last month that the “policy experiment” was not able to stimulate the development of the multi-peril insurance market as intended, and that “there are unspent funds in that program.”

Andrew Weidemann, Grain Producers Australia chair and Victorian grain program, agreed that the scheme was essentially “a waste of effort.”

“Just offering up a business risk management program isn’t going to set up a successful industry,” he told the publication.

Weidemann said now’s the time for a roundtable involving farmers, the grain industry, insurance agents, and the government to “flesh it [the scheme] out properly and continue the push” for MPCI, as there was currently no great need for the scheme because of the good weather and “great” growing conditions for farmers.

“The money’s still there and so we need to look at other ways of using it to help manage risk, in the longer term,” he told Queensland Country Life.

“Right now nobody is knocking on anyone’s door saying we’re struggling because it’s too dry so we need to keep this on the political agenda before we hit a massive dry spell and everyone’s out asking the minister for something to be done urgently, because the sky is falling in.”


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