Posted on: June 16, 2021
Crop insurance: for when you’re thrown a curveball
Whether it be sugar and starch, cotton or corn, crops are key in providing food for humans and fodder for livestock. We’ve got farmers to thank for the clothes on our back and the food on our plate. But the journey from farm to table can be a bumpy ride, which Aussie farmers know first-hand.
Mother Nature provides your crops with rainfall and sunshine. Yet, the environment’s unpredictability can take it all away in an instant. Although poor weather conditions and outer influences are often unavoidable, having crop insurance in place gives you protection when you need it the most.
Challenges faced by Australian farmers
Being a farmer is unpredictable at the best of times and being an Aussie farmer can be even more complex. Farmers need to constantly adapt to the changing needs of our planet and the expectations of regulators, consumers, and food processors and retailers.
Climate is one of the most difficult risks to manage. From hailstorms to drought, the variety of conditions makes it tough for farmers to plan their risk management to protect against every possible peril. A single storm can turn your farm upside down and devastate your crops, becoming a real can of worms if you don’t have crop insurance in place.
Infestations and pests might be small, but the risk they pose certainly isn’t. Recently, we’ve seen the devastating impact of the mice infestation in New South Wales and Queensland, throwing the farming industry into turmoil. The loss of grain groups such as wheat, barley and canola, as well as fodder for animals, is having a huge financial impact on Aussie farmers.
When risk becomes reality, farmers can struggle to keep up with financial commitments and supply agreements. It can be difficult to repay loans, invest in equipment and resources as well as meet personal payments such as mortgage expenses. The knock-on effect of a bad season can seem never-ending, which is where crop insurance can help you to stay on your feet.
What is crop insurance and how does it work?
Crop insurance helps to protect farmers against the loss of crops or the loss of revenue, whether as a result of damage or price fluctuations in the market. Depending on your crop type and location, insurance can be provided for various risks.
When you’re considering what cover is right for you it’s important to look holistically at your risks, like:
- Fire and hail: Fire and hail are some of the greatest risks for your crop. This cover typically includes a loss of yield or damage to your crop, plus damage as a result of you taking steps to safeguard it from the immediate threat of fire. Also, the cover can include some other benefits such as transit cover (following harvest), some storage cover and damage caused by straying livestock.
- Machinery: The unexpected breakdown of machinery or electronic equipment can have a significant impact on your operations. Insuring your machinery can help get you back to tending to your crops, with less financial strain on your business.
- Business: There are a few insurances you could consider to financially protect your business from certain types of risks, like business interruption – covering the shortfall in gross profits caused by the interruption from insured events.
How do I choose the right crop insurance for my farm?
Working with an insurance broker is the best way to determine which type of crop insurance is likely to work best for your unique setup.
At GIA Insurance Brokers, we work with a range of farmers from broadleaf croppers to fruit and veg growers. We have access to market-leading insurance solutions available for your farm’s unique needs and can help you find some of the best value cover for your crops.
Talk to us today about your crop insurance needs.
General advice warning
The information above may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information.
Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.
