The National Farmers Federation (NFF) has released the findings of the Future-Proofing Farming Report that examined options to better manage and mitigate the risks faced by farm businesses.
Funded by the NSW Government, the NFF was asked to identify potential models that could be used to protect farmers against income loss in future droughts or even natural disasters. These included insurance and hedging products, incentivising off-farm income, leveraging mutual and cooperatives, education and training, and public policy setting.
NSW Farmers CEO Pete Arkle said the collective work highlights the significant diversity of agriculture and the potential challenges and opportunities in establishing strategies to improve farm business resilience.
“The project outcomes support ‘no regrets’ investments for government to enhance reliable weather data collection and forecasting and to improve the risk management capabilities of the agricultural advice network,” Mr Arkle said.
“NSW Farmers has welcomed additional investment by the BOM and NSW Government in weather forecasting technology and has supported the NSW Government Farms of the Future Pilots under the Snowy Hydro Legacy Fund.”
“The investigation into the role of government in backing the establishment of an industry-wide system for multi-peril or income protection insurance coverage has again suggested that not all farmers would benefit from the approach and it would come at a significant cost to governments.”
“Every farm is different, so the conclusion that many farmers may have other, more economically compelling, options to manage risks on their farmers isn’t surprising.” “However, we must continue to explore what a viable farm income protection insurance product might look like in Australia.
“The project found that there are farmers who would benefit, and that’s where we should focus to start to build a market for these potentially valuable risk management tools.”
Mr Arkle said better targeted insurance subsidies could be explored, including those that encourage young farmers into the industry or promote succession planning, particularly focussing on prioritising initiatives that are risk and farmer-led, rather than product or intermediary led.
“NSW Farmers has a long standing policy to engage government and industry to progress a subsidised all risks insurance scheme for all Australian agriculture.”
“We call on the NSW Government to continue to work with NSW Farmers and the insurance industry to explore feasible options, through enhancing data availability to support farmer decision-making and foster information sharing; and to enhance awareness and understanding of available resilience tools.”