A review undertaken by the Department of Agriculture and Food has concluded a Multi Peril Crop Insurance (MPCI) Scheme is not commercially viable in Western Australia.
Agriculture and Food Minister Terry Redman said while he was supportive of an MPCI insurance scheme, it would have to be driven and funded by industry.
Mr Redman earlier this year requested the department to undertake a review to determine if the market had changed and if a scheme would now be viable in WA.
Previous reviews by State and Federal Governments had also concluded the scheme was unviable.
"Currently WA farmers can insure their crops against fire and hail but the concept of insuring against other risks such as drought, flooding and frost has been discussed Australia wide for a number of years," he said.
"Although insurers in WA have the option to offer MPCI, it appears they see the risk as too big, with a significant take up for the scheme needed.
"However, the report does note that there is now an emergence of other types of innovative risk mitigation products which are at an early stage of grower take-up, and that these insurance products may prove supportive for growers in the future."
"The department's report concluded that any MPCI scheme was more likely to be successful if the policy was offered across Australia, thereby significantly reducing the risk undertaken by insurers."
Mr Redman said he would welcome comments from industry on the report by July 30, 2009. These comments should be directed to the Department of Agriculture and Food at mpcireport2009@agric.wa.gov.au
He said his department would continue to work closely with farmers on climate adaption strategies and drought mitigation options.
"I know that the challenges of farming are many and varied and farmers take business risks every day.
"We are supporting WA farmers with ongoing research into preparedness and self reliance to overcome our variable climatic conditions and looking at ways to lower input costs for cropping and better utilisation of water," he said.
Access a copy of the report at: http://www.agric.wa.gov.au
Minister's office - 9213 6700
