❓ A WA parliamentary question explores the potential of climate risk mitigation insurance for grain farmers, particularly in relation to existing state support packages. The government acknowledges the potential but isn't currently prioritising it.
AnsweredQoN 50Legislative Council
QuestionView source ↗
AGRICULTURE — CLIMATE RISK MITIGATION
INSURANCE
50. Hon PHILIP
GARDINER to the Minister for Agriculture and Food:
In considering strategic support measures
for farmers, in particular within the context of the state's $7.8 million
package that is being provided to grain farmers —
(1) Is the
Western Australian government considering climate risk mitigation insurance as
a complementary plank to its farm assistance package?
(2) Does the
state government have any independent report concerning climate risk mitigation
insurance and its relevance to Western Australian agriculture; and, if not,
will it commission one?
(3) Has the
state government engaged with Swiss Re or any other reinsurance company that
has been looking at rolling out a risk mitigation insurance option to WA
farmers; and, if so, what has the government offered it in the way of support?
(4) Does the
state government believe it is taking an unacceptable risk on frost or drought
hitting those farmers who will receive state and federal farm support funds
this year?
(5) Does the
state government consider that any future taxpayer-funded financial support
should go only to farms with risk insurance?
(6) Would the
state government support a two-year, two-million-hectare underwriting trial at
$5 per hectare in the eastern wheatbelt, with an additional $10 million
investment for radar, satellite, weather and data collection to help kick-start
crop risk insurance in Western Australia?
INSURANCE
50. Hon PHILIP
GARDINER to the Minister for Agriculture and Food:
In considering strategic support measures
for farmers, in particular within the context of the state's $7.8 million
package that is being provided to grain farmers —
(1) Is the
Western Australian government considering climate risk mitigation insurance as
a complementary plank to its farm assistance package?
(2) Does the
state government have any independent report concerning climate risk mitigation
insurance and its relevance to Western Australian agriculture; and, if not,
will it commission one?
(3) Has the
state government engaged with Swiss Re or any other reinsurance company that
has been looking at rolling out a risk mitigation insurance option to WA
farmers; and, if so, what has the government offered it in the way of support?
(4) Does the
state government believe it is taking an unacceptable risk on frost or drought
hitting those farmers who will receive state and federal farm support funds
this year?
(5) Does the
state government consider that any future taxpayer-funded financial support
should go only to farms with risk insurance?
(6) Would the
state government support a two-year, two-million-hectare underwriting trial at
$5 per hectare in the eastern wheatbelt, with an additional $10 million
investment for radar, satellite, weather and data collection to help kick-start
crop risk insurance in Western Australia?
AnswerView source ↗
I thank the honourable member for some notice of the
question.
(1) No; the
state government is not targeting the state package at underwriting the costs
of a climate risk insurance program. Rather, the package is aimed at supporting
communities and viable farm businesses that have high, but manageable, debt
levels.
(2) No; the
state government has not commissioned any independent report on the cost
benefit of risk mitigation insurance for Western Australian farmers, but it has
reviewed a wide range of reports on its effectiveness and cost. At this stage
the government will work to support farmers, the banks, Co-operative Bulk
Handling Ltd, grain traders and potential insurers on any independent economic and
due diligence study.
(3) The state
government has met with Swiss Re a number of times and has provided it with
data on yields, rainfall and frost risks. The Department of Agriculture and
Food WA is currently rolling out a number of micro weather stations to help
farmers and insurers manage crop risk.
(4) No; the
state government has put in place minimum equity provisions so that only viable
farm businesses with at least 55 per cent equity are being supported, and it
believes that all farmers receiving support this year are viable.
(5) At this
stage no frost or drought risk mitigation insurance is available to WA farmers,
but the state government would be prepared to consider making it a condition
for any future assistance if such insurance was available.
(6) At this
stage the government has no funds to allocate to underwriting a scheme for any
crop risk insurance trial but it is looking at what additional data collection
support it can provide to farmers to help them manage seasonal risks.
Having met with Swiss Re, and having had a look at some of
the data and the possibilities, I must admit that I found it extremely
interesting. I have to say that I believe that in the very near future, that is
the way we will have to go. If people borrow money to buy a house, they need to
have it insured. If people borrow money to buy a car, they need to have it
insured. So I believe that with the technology that is available, we are
getting closer to what we need to have.
question.
(1) No; the
state government is not targeting the state package at underwriting the costs
of a climate risk insurance program. Rather, the package is aimed at supporting
communities and viable farm businesses that have high, but manageable, debt
levels.
(2) No; the
state government has not commissioned any independent report on the cost
benefit of risk mitigation insurance for Western Australian farmers, but it has
reviewed a wide range of reports on its effectiveness and cost. At this stage
the government will work to support farmers, the banks, Co-operative Bulk
Handling Ltd, grain traders and potential insurers on any independent economic and
due diligence study.
(3) The state
government has met with Swiss Re a number of times and has provided it with
data on yields, rainfall and frost risks. The Department of Agriculture and
Food WA is currently rolling out a number of micro weather stations to help
farmers and insurers manage crop risk.
(4) No; the
state government has put in place minimum equity provisions so that only viable
farm businesses with at least 55 per cent equity are being supported, and it
believes that all farmers receiving support this year are viable.
(5) At this
stage no frost or drought risk mitigation insurance is available to WA farmers,
but the state government would be prepared to consider making it a condition
for any future assistance if such insurance was available.
(6) At this
stage the government has no funds to allocate to underwriting a scheme for any
crop risk insurance trial but it is looking at what additional data collection
support it can provide to farmers to help them manage seasonal risks.
Having met with Swiss Re, and having had a look at some of
the data and the possibilities, I must admit that I found it extremely
interesting. I have to say that I believe that in the very near future, that is
the way we will have to go. If people borrow money to buy a house, they need to
have it insured. If people borrow money to buy a car, they need to have it
insured. So I believe that with the technology that is available, we are
getting closer to what we need to have.
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