How drought protection is changing the nature of crop insurance

For farmers and the insurance brokers they work with, changing environmental conditions are forcing them to rethink the crops they grow and how they manage their farm. Water scarcity has an impact on everything from the crops farmers choose to plant, when they choose to plant them and what equipment is used to water them as they mature.

While droughts have been common in Australia over the last 20 years, the current dry spell in particular is putting more focus on how the country's farmers can respond to lower rainfall. In fact, in August, the government declared that New South Wales was "100 per cent in drought", underscoring just how widespread the current dry spell is in the country's most populous state.

In August, the government declared that New South Wales was "100 per cent in drought"

As NSW responds to this challenge, every state in the country is coming to grips with the demands of a much drier landscape. Queensland farmers in particular have seen considerable changes, with one crop expected to have a much greater impact on the state's agriculture sector over the coming years.

The next generation of Queensland crops

As many parts of Australia come to grips with drought conditions, Queensland farmers are responding by changing the types of crop they're growing in order to match drier conditions.

That's the finding from research by the Queensland Alliance for Agriculture and Food Innovation. The organisation predicts that sorghum will be the state's top crop over the next 35 years, driven in no small part by its ability to stand up to low rainfall.

Could Sorghum help Australian farmers respond to drought?Could Sorghum help Australian farmers respond to drought?

Many of the state's brightest are also looking to start breeding sorghum to further improve the plant's resistance to heat and reduce the amount of water required to grow this valuable crop.

While changing crops and further enhancements to the genetic level offer some chance to mitigate the risks farmers face, there's also innovations afoot in the equipment used to support Australia's farms.

Greenhouses help farmers save water

Greenhouses have been a staple on many Australian farms for years, largely because of their ability to extend growing seasons and provide a sheltered environment for plants to grow. However, they could also hold the key to reducing water use.

This is because many greenhouse installations are able to use much less water than traditional farming techniques. With a traditional overhead watering system only 20 per cent actually reaches the soil, according to research from the University of Massachusetts. That compares to 100 per cent in a controlled greenhouse environment where water can be applied directly to the soil.

Of course, while new technologies and equipment like greenhouses is helping Australia's farmers, there's also the rise of new insurance products that can help to manage extreme weather conditions.

Greenhouses could offer a way for farmers to reduce overall water consumption.Greenhouses could offer a way for farmers to reduce overall water consumption.

The rise of multi-peril crop insurance

As many brokers will have now seen in regional Australia, multi-peril crop insurance policies are becoming more prevalent, driven by a need from farmers to ensure themselves against the very worst conditions.

Multi-peril cover goes beyond traditional policies that insured against hail, fire and frost, and has been used extensively in Europe and North America as a way for farmers to offset some of the risks they face around drought and extreme weather conditions.

Beyond multi-peril, brokers have the option to offer their farming clients policies like greenhouse insurance, to protect the investments they make in drought-proofing.

If you'd like to know more about how a multi-peril insurance policy could help the farmers you work with to manage the risk of drought, contact our team at Primacy today. Our partner brokers have access to both our wide range of possible types of cover and PATH, our online tool to help brokers tailor policies and keep client information up-to-date, no matter where they are.