The Insurance Council of Australia (ICA) will engage with Canberra on its five-point crop insurance plan to manage future droughts.

ICA took the plan to last week’s National Drought Summit, where talks focused more on short-term relief for the rural sector.

The plan calls for the removal of state and territory stamp duties on agricultural insurance, a data census to support underwriting of the sector, and making it mandatory for producers to have adequate farm cover when they apply for government concession loans.

Tax offsets or reductions for farm-related cover and establishment of a government guarantee facility for 25% of losses in one-in-60 or one-in-100-year droughts are also suggested.

“ICA believes adoption of its proposals would help primary producers operate sustainable businesses in good times and bad through greater uptake of crop and farm income policies,” spokesman Campbell Fuller told insuranceNEWS.com.au.

The National Farmers’ Federation is also pushing for the abolition of levies on farm policies, a 150% tax incentive for taking up multi-peril crop insurance (MPCI) and other government measures to encourage risk mitigation products.

Industry players agree on the need for more government support, particularly for MPCI.

“I think, at the end of the day, that’s not enough [for MPCI]; the removal of stamp duties is certainly something that can be a part of it,” Country Wide Insurance Brokers MD Paul Wilkes told insuranceNEWS.com.au.

“What needs to come into play is a government subsidy, which is the case in other countries.”

AgriRisk Services MD John van der Vegt told insuranceNEWS.com.au farmers in countries where MPCI take-up is high view the product differently.

“In most countries where they work well, they are relatively cost-effective and so the growers buy it every year.

“It’s just a standard cost of production for them, whereas over here it’s so expensive that the growers will only buy it if they really think it’s going to be a bad season.

“It’s a different mindset at the moment. We have to change that mindset and that’s going to be a slow process.”