Affordable multi-peril crop insurance is back on the national agenda with the formation of a grains industry working party that will attempt to entice more insurance providers into the agricultural space.
But industry leaders and farmers say government involvement is the key to the long-term success of any viable insurance program.
Despite the introduction of Latevo International's Certainty Insurance earlier this year, many farmers still believe multi-peril crop insurance is too expensive to be of any value to their business.
The Certainty Insurance product is underwritten by Allianz and provides crop income insurance protection in times of frost, flood, drought or other designated perils.
Some industry commentators say greater competition in the industry is essential for these types of products to be affordable in the long-term.
An industry meeting in Melbourne, which culminated in the formation of the working party, heard the biggest impediment to a broad-based insurance scheme was the lack of agricultural production data available to re-insurers.
The new working party, chaired by NSW Farmers president Fiona Simpson, hopes to overcome previous barriers, and instigate a program that will protect farmers against drought, flood, frost and market risk.
Muntadgin farmer Jeff Hooper believes a commitment by the Federal Government to become involved in multi-peril insurance for Australian farmers is essential for products to be viable for the majority of growers.
"To me it would be a sign that they are interested in the industry and they want to see a strong, viable industry," he said.
"I'm very supportive of multi-peril crop insurance, and I believe what we have at the moment is a good start, but I want to see it work for all growers in the long-term."
Mr Hooper, who was involved in holding grower forums to discuss the issue, says Australia needs to look to other countries that have developed insurance products of this nature.
"In other countries, the government seems to actively promote risk mitigation insurance as a tool to protect income, so in that respect I would certainly like to see government involved," he said.
According to Grain Producers Australia chairman Andrew Weidemann, Australian farmers need more than the Government's adhoc drought and flood relief provided to growers in exceptional circumstances.
"There must be, and is, a better way to provide a functional, objective and viable mitigation of normal production risk to improve the financial resilience of the agricultural sector," he said.
WAFarmers Grains Council senior vice-president Duncan Young, who attended the industry meeting in Melbourne, believes both government involvement and increased competition were critical for any multi-peril scheme to work.
"For things to happen in the future there has to be competition in this space, and for competition to occur there has to be a willingness for the re-insurers to come out and participate in the agricultural industry in Australia," he said.
"The reason why other countries have multi-peril insurance is because they have government backing, and that includes Canada.
"All around the world, all the countries that have it have some form of government backing."
WAFarmers president Dale Park called on the Federal Government to invest in market mechanisms such as multi-peril insurance that would be usable for all growers.
"Exceptional circumstance programs have not worked for WA in the vast majority of cases and the exceptional circumstance funding that the Eastern States used to know is not going to be what they get in the future," he said.
"What the Government should do is put the money that they are putting into drought relief into market mechanisms that growers can actually use and we would all be better off."
In 2011, an attempt by CBH to launch a multi-peril crop insurance scheme in WA backed by Willis Australia, fell flat.
According to a CBH spokeswoman, the uptake by farmers was too small to make the product viable.
