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Beating drought with agricultural insurance

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Farm businesses have a new tool to help protect against the perils of drought, frost, hail and fire, with the Australian Government announcing the introduction of the Managing Farm Risk Programme.

Deputy Prime Minister and Minister for Agriculture and Water Resources, Barnaby Joyce, said the Coalition government recognised the great potential for insurance to help farmers reduce the financial risks caused by drought and events beyond their control.

“For years Australian farmers have been asking for insurance products to help manage income risks and give peace of mind against pests, droughts and flooding rains and it has taken this Coalition Government to deliver a meaningful incentive,” Minister Joyce said.

“This is another result from the Agricultural White Paper, delivering real policy change to complement real delivery in market development.”

The $20 million Managing Farm Risk Programme is another significant Agricultural Competitiveness White Paper measure delivered by the Coalition Government.

“By encouraging farmers to prepare their business for adverse conditions through the use of insurance, the Government is helping to build the resilience of the agricultural sector against drought,” Minister Joyce said.

“The programme will provide one-off rebates to help eligible farm businesses with the cost of independent and professional advice on an insurance policy that covers threats to their productivity, such as drought and other production and market risks.

“The rebates will provide up to $2,500 in dollar-for-dollar matched funding against the costs incurred by an eligible farm business in securing, or attempting to secure, agricultural insurance.

“I encourage farmers to consider their insurance options, such as single or multi-peril insurance. While it may not be suitable for all farm businesses, it has great potential to assist many farmers safeguard their business and provide a sense of financial security.

“This programme will help to develop a more diverse and mature insurance market to meet the varied needs of all farm businesses, with new insurance products already emerging.”

The Managing Farm Risk Programme builds on other initiatives to help drought proof farm businesses such as doubling the cap on Farm Management Deposits and providing accelerated depreciation for construction of on-farm water infrastructure and fodder storage.

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