Queensland MP Robbie Katter believes multi-peril crop insurance could be the saviour of the Australian rural industry. The Katter Australia Party state leader returned from a multi-peril crop insurance summit hosted by the NSW Government in Sydney enthusiastic about a scheme he said would keep families on farms. Multi-peril crop insurance protects crops against natural perils including adverse weather, fire, insects, disease, and failure of irrigation water. Mr Katter believes it has the potential to "turn the tides" for the struggling sector. "Agriculture is a game of snakes and ladders, and the snakes will always be there to tear your crop down," he said. "This just takes the snakes out of the snakes and ladders game." Last year, following a failed season, a Queensland farmer was awarded $944,000 by insurance company Latevo, in partnership with Allianz. It was the largest payout under the initial offering of multi-peril crop insurance in Australia. Slow start for multi-peril insurance in farming sector The option initially received a lukewarm response from the rural sector, with just 29 farmers taking up the insurance across the country. NSW Minister for Primary Industries Niall Blair said the summit was aimed at supporting the development of the multi-peril insurance market, and offering the farming sector another tool to manage the risks it faced. Mr Katter believed the key to the viability of such insurance for insurers and farmers was for state governments to offer tax incentives to offset the cost of premiums, with the knowledge that the returns would make such an investment worthwhile. "The lending attitudes would change," Mr Katter said. "So if you have more security around your income, then the bank is going to like you more." Under the current system, if a farmer has a bad season, he might only be able to borrow $50,000 from the bank to plant the next crop, and if an entire community of farmers wound up in the same predicament, it would spell economic disaster for local businesses. "But if we all have multi-peril insurance, the banks have a lot more security associated with that cash flow and they might lend you $100,000 and you've doubled the production in that district," Mr Katter said. "So there's a very strong economic argument for the government that the tax benefits of having all that extra production... can offset any costs at the front end." Academic says government support is needed Mr Katter's views are supported by United States professor of agricultural economics, Dr Vince Smith, who has studied the rollout and implications of multi-peril insurance in his own country. Earlier this year, Dr Smith told the ABC the US Government paid out $80 billion a year in federal crop insurance, adding that no private insurer could survive a year without government assistance. Meanwhile, Mr Katter, who was the only Queensland representative at this week's summit, said he was "far from ready" to make a recommendation to the Queensland Government on multi-peril insurance. But the summit had given him a better understanding of how it could work. "We've made some essential contacts and we'd be hoping to bring them in as part of the rural taskforce discussions to address rural debt in Queensland," he said. Source - http://www.abc.net.au