Contract harvesters face a significant rise in insurance premiums, with up to $54,000 quoted to insure a new header and front this season.

Key points:

  • Some contract harvesters have been quoted $54,000 to insure a new header and front this season
  • The Australian Custom Harvesters group plans to meet with actuaries to advocate for contract harvesters 
  • Meanwhile, grain growers are racing to have crops insured with more severe weather forecast in the future

Australian Custom Harvesters president Rod Gribble said the prices were unsustainable, and they were putting the contract harvesting profession at risk.

“If we wanted to pass that onto growers, that’s probably $140 to $150 extra an hour just for insurance alone. I don’t think that’s sustainable at all,” Mr Gribble said.

Mr Gribble said the jump in machine values had contributed to the rise in prices but noted insurance premium percentages had also increased.

“It used to be about 0.9 per cent of value, but it’s slowly crept up. Most contractors are paying over 2 per cent, and many are paying over 4 per cent, plus you have your public liability of $5,000 a year,” Mr Gribble said.

“It depends on the risk and your history. Different crops have a different risk ratio. If you’re doing a lot of higher risk crops, like chickpeas, for example, there’s a higher risk to that.”

Meetings are planned

The Australian Custom Harvesters group plans to meet with actuaries to advocate for contract harvesters and explain the risk mitigation practices they undertake.

A spokesperson for The Insurance Council of Australia (ICA) said, “globally insurance is currently what is known as a hardening market, meaning that access to capital has become constrained and insurers’ underlying costs are rising”.

“The insurance industry recognises that many business sectors, including agriculture and farming, are facing challenges accessing the insurance they need to operate.

“But at the same time, insurers themselves are under pressure to provide a profitable product, so solutions are often difficult to determine.”

The spokesperson said, therefore ICA had commissioned an Independent Strategic Review of commercial lines of insurance, with a final report handed down last week and a suite of actions established.

Crop insurance spike

An aerial shot of wheat trial plots in Narrabri, NSW.

Some farmers are racing to take out cover for crops, with more wet and severe weatehr forecast.(

Supplied:  Kieran Shephard

)

Where there are contract harvesters, crops are waiting to be harvested and exposed to the elements.

Managing director of weather insurer Celsius Pro Jonathan Barrett said they had been busy trying to keep up with farmers wanting more insurance cover off the back of recent rain and hail throughout New South Wales, as well as long-range forecasts.

“Just over the last two to three weeks, we have been absolutely flat chat trying to get that risk off the farmer’s paddock and into the market where it belongs,” he said.

Mr Barrett said the most demand for insurance was from farmers in north-western New South Wales and south-western Queensland.

“We’ve been through three to four years’ worth of drought, and now we’re coming into that volatile time and period with the rain.”

Farmers race against risk

A tall crop with ominous storm clouds in the distance

Nyngan grower Richard Bootle has taken out crop insurance for the first time in 16 years.(

Supplied: Richard Bootle

)

The upcoming harvest is shaping up to be a race against the clock for Western New South Wales farmers, with a wet outlook and rising mouse numbers threatening promising crops.

Nyngan grower Richard Bootle is preparing to harvest his canola and wheat crops.

“Is the next thing we’re going to face – aside from COVID and a mouse plague – a wet harvest? Yeah, probably!”

“It is exciting that we’re getting a weak La Nina for the second year in a row, which brightens our outlook for summer and gives moisture for next year.

“But that obviously in the short-term will mean much higher likelihood of rain over harvest, which is never a good thing. The crop isn’t there until it’s in the bin.”

Due to the stormy outlook, he has taken out crop insurance for the first time in almost two decades.

“I risked it last year and had some very sleepless nights with forecast hail coming towards us. We got away with it last year, and I just thought, I’m not going to get away with it this year!”

Contract harvesters face significant insurance premiums
Source:
Source 1

LEAVE A REPLY

Please enter your comment!
Please enter your name here