The Federal Government has cut funding for crop insurance grants by $9 million.

Last week Agriculture Minister Barnaby Joyce announced the grants have been capped at $20 million, down from $29.9 million allocated in the agriculture white paper last year.

A spokesman for the minister told insuranceNEWS.com.au the reduction is due to Canberra managing the program, rather than states.

“The four-year funding allocation has been revised, taking into consideration administrative savings from the Commonwealth delivering these grants nationally instead of contracting the state and territory governments.

“The Government has also received advice from industry that the level of demand for this grants scheme may have been overestimated at the time of the agriculture white paper.

“The $20.2 million available is expected to be adequate to meet anticipated demand for this assistance during the term of the program.”

insuranceNEWS.com.au understands that while there have been applications for grants from some farmers, the Government has processed none to date.

The one-off grants will help cover the cost of independent, professional advice on multi-peril crop policies. They are for up to $2500 each, to be matched dollar for dollar by the farmer.

Mr Joyce has urged farmers to consider crop insurance this growing season.

“While it may not be suitable for all farm businesses, it has great potential to help many farmers safeguard their business and provide a sense of financial security,” he said.

“This program will help develop a more diverse and mature insurance market to meet the varied needs of all farm businesses, with new insurance products already emerging.”