As a farmer you understand risk management and how to throw hundreds of thousands of dollars out in the paddock and get it back. However it only takes one bad year. Farmers regularly say things like “looking at the figures over the last X years only once would Multi-Peril Crop Insurance have been beneficial.” That’s like saying we don’t insure the $500,000 header because only once in the last X years have we had a bit of a fire where it would have been beneficial.
Don’t gamble it – protect the future of your farm and your family
Unless you can predict the future and changing weather patterns, can you afford to self-insure now when finally there is a product to give you financial backup? If you have half a million dollars in the bank to self-insure that loss then that’s probably okay. Don’t be fooled into thinking that self insuring doesn’t have a cost… Just one bad year can take hundreds of thousands of dollars out of your pocket and destroy your farm business. Remember if you have to go the bank to borrow money, you pay the bank’s risk premium in their interest charges. Also the conservatism that results from self-insuring has an opportunity cost. It restricts growth decisions such as forward selling a greater percentage of grain when prices are high, taking opportunities to expand with leasing more land or purchasing a new property or investing more in the crop when prices are up. According to Mark Twain, ‘farming is simply gambling with dirt’ but that doesn’t have to mean you’re gambling with your farm and your family’s future.
Increasing awareness and mitigating mental health risk factors for farmers
Depression and anxiety are being talked about more and more in the farming community, with too many suicides as a result of financial pressures (in fact, the risk of suicide is significantly higher for male Australian farmers than the general population or non-farming males). Multi-Peril Income Protection goes some way to reducing these financial pressures. When we are stressed and anxious it clouds our thinking, having protection to cover the worst case can allow you to make logical decisions. This article from the ABC demonstrates the risk and concern around mental health for WA farmers during a bleak harvest outlook or financial pressures. If you or someone you know is at risk please reach out to Lifeline.
Farmers helping farmers
People often forget what insurance is. Insurance is the pooling of money that is then used to assist those that need it. The farming community is generally very generous providing hay and grain where and when it is needed to assist those in drought. Insurance does some of that automatically and more effectively. Insurance companies manage that pool of money and spread the risk over insurers locally and around the world. Many people have come together to create this product for Multi-Peril Income Protection with backing through Lloyd’s of London to give farmers a way to spread the risk and allow them to compete with farmers the world over who already have access to similar products.
Don’t just survive. Thrive!
Farmers are used to being conservative when making decisions as already discussed but this product allows farmers to lift the eyes and see what could be. It helps protect family’s finances and health in what is a difficult industry. As a broker for the professional farmer, we recommend this product. We suggest at least getting a quote for Multi-Peril Income Protection and talking through your specific situation – it costs you nothing but could result in a lot of peace of mind.
General Advice Warning
Please note: The information provided in this article is only general in nature – before making business decisions you should consider seeking advice specific to your situation.
