Posted on: December 20, 2022

How to Cut Your Farm’s Risks and Insurance Premiums

The value of agricultural, fisheries and forestry production has lifted by 7% over the past 20 years. This is partly due to adopting better management practices and new technologies.

It can be a battle to keep improving risk management. The spinoff of getting it right, though, is reducing your insurance premiums.

Check out these five tips about the main risks and what you can do about them.

Types of risk

As a farmer, these are the risks you face:

  • Unreliable weather and climate change patterns
  • Fluctuations in commodity prices – for inputs and outputs
  • Conditions such as pest, disease, illness and weed levels
  • Regulatory and legal frameworks
  • Consumer expectations, including product traceability, ethical/environmental practices, etc.

The South Australian Department of Primary Industries and Regions encourages farmers to consider their outcomes through the lenses of financial returns, environmental impact and social aspects. The department lists these risk categories:

  • Inherent. The soil and climate of your farm
  • Management-influenced. Those you can influence to some degree
  • Whole-of-business management. Your business size/scale, equity, off-farm assets and how well you can service debt or expand
  • Enterprise management is about production management skills
  • Labour management. Covers internal and external workers
  • External risks. What you pay for inputs and the prices you achieve for commodities.

Can you make incremental or possibly transformational changes on any or all of these?

Ensure equipment safety

Here’s a refresher to keep your equipment humming:

  • Read and follow the instruction manual
  • Comply with safety regulations and laws
  • Follow your state or territory’s rules, such as these if you’re in NSW when your farm equipment is on public roads
  • Move children and animals from where you’re working.

Use and store chemicals safely

For chemical use, Better Health Victoria recommends:

  • Only trained people use agricultural chemicals
  • Using decanting kits to minimise splashes and spills while mixing these liquids, and only make up what you need
  • Avoiding exposing plants or animals that you’re not targeting
  • Triple-rinsing your equipment after use.

Best practices for chemical storage are:

  • Follow the manufacturer’s instructions, and keep the chemical in the original container with the label intact
  • Store them in a well-ventilated, locked shed with floors to absorb any spills
  • Don’t stockpile all your chemicals – keep different classes away from each other – and ensure they’re not near seeds, fertilisers and animal feed
  • Separate filters from masks
  • Store liquid chemicals below solids
  • Beware of having ignition sources nearby
  • Record the chemicals you’ve bought, store and use
  • Have sand, soil or other mop-up materials handy.

Working with livestock

Working with animals can be unpredictable, particularly during the joining season. Be sure to keep the equipment, shed and yards you use for your livestock in good condition.

Aim to update your workers with animal-handling training, the quirks and temperament of your herds/mobs, and your yard design. Be alert about livestock risks when visiting sale yards and other farms.

Other tips include:

  • Check for hazards such as broken posts/gate latches, holes in fences
  • Test restraining equipment before you use it
  • Keep your laneways and walkways as dry and non-slip as possible
  • Record and deal with near misses, incidents and injuries to identify opportunities for improvement
  • Have at least one family member first-aid trained (and a worker)
  • Talk about safety issues regularly with your workers, family and animal handlers
  • Pace inexperienced workers/bystanders and other visitors through your site safety as they’re more likely to be injured.

For more tips, visit this government website.

Aim to mitigate weather & climate risks

Unreliable weather patterns and climate risks can upset plans for farm management. Cushion your operations:

  • Diversify, including off-farm income
  • Harnessing insurance cover to minimise your overall and for specific perils, including hail, fire, floods, heat waves, drought, cyclones, etc.

With the range of risks farmers face daily, it pays to consider a package of insurance policies customised to suit the needs of your unique operations. For example, you may need home and contents, farm property, farm liability, and vehicle and crop cover.

We can help you earn discounts on your premium with such a package. Strong and consistent risk management is a crucial step.

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