Stamp duties on farm insurance products must go, the Insurance Council of Australia (ICA) said today as it outlined a five-point plan to spur the take-up of agricultural income protection covers.

ICA will present the plan for consideration at tomorrow’s National Drought Summit hosted by Prime Minister Scott Morrison, who has declared tackling the prolonged dry spell as one of his top priorities.

ICA says Canberra should also offer tax offsets or reductions for farm income and crop products and set up a government-guarantee facility for 25% of losses for declared 1-in-60 or 1-in-100 year droughts.

Other proposals include running a data census to support underwriting of the sector and making it compulsory for producers to hold adequate farm or crop cover when they apply for government concessional loans.

“Government support should be directed at encouraging the take-up of crop and farm income insurance,” ICA CEO Rob Whelan said today.

“The abolition of stamp duties for agricultural insurance products is one of five measures that insurers believe would help primary producers in times of drought and protect an important sector of the economy.”

Victoria and NSW are the only two states where taxes on farm income insurance have been axed.

“State taxes and levies on insurance are unfair and highly inequitable, and contribute to the low uptake of farm income and crop insurance products,” Mr Whelan said.

The National Farmers Federation (NFF) is also urging the Government to do more to encourage take-up of farm insurance policies.

The NFF wants the Drought Summit to consider its range of proposals, which includes also a 150% tax incentive on farm insurance premiums for five years.

It also supports the removal of stamp duties on agricultural insurance products.

NFF President Fiona Simson says international experience demonstrates that creating a viable agricultural insurance market depends on early government support.

“To that end, NFF has asked the Government to consider introducing a 150% tax incentive on multi-peril, farm income and other climate-related agricultural insurance premiums for five years.”