Strategis Partners, the management consultancy firm, has submitted a report about the importance of crop insurance to the Agricultural Competitiveness Taskforce, which was set up by the Australian government to boost the country’s agricultural productivity and profitability. It’s part of the consultation process for a white paper, which is due to be published by the taskforce in 2015.
Strategis Partners’ submission is a report on a recent symposium it held in Sydney on the future of crop insurance. The key theme the event explored was the need to reduce crop production uncertainty for farmers and that doing so does not need to be costly.
But producers, agri bankers and farm advisors must be educated on the potential role of crop insurance to get a true understanding of their level of risk and the comfort insurance could give. The government also needs to give encouraging signals to encourage the adoption of insurance and insurers must invest more in their agricultural insurance policies.
“Agriculture is Australia’s riskiest economic sector, possibly becoming more risky over time; so better risk management is essential for Australian agriculture,” reads the report.
Speaking at the event, Mick Keogh, executive director of the Australian Farm Institute, said that “current risk management strategies have potentially high, but largely hidden costs, and that there are political and productivity costs associated with inefficient risk management systems.” He also explained that “the deregulation of government support measures over the last decade has contributed to Australian agriculture’s heightened risk profile”, according to the report.
Submissions to the white paper are based on the government’s Green Paper that was published in April, and closed on Friday. The consultation process is expected to continue into 2015.
Watch out for a Q&A with Australia’s agriculture minister Barnaby Joyce later this week.