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  • Writer's pictureAmanda Bird

5 Reasons Australian Crop Farmers Should Get Insurance

Farmers in the United States are subsidized by the government crop insurance program to protect their profits. In contrast to this, each farmer is free to choose the level of protection that best suits their needs in Australia.

Why do Aussie farmers need crop insurance? The top reason for crop insurance is for risk management and protection. In the event of the unimaginable, farmers can be protected by crop insurance.

Several variables affect a farmer's season, crop, and pricing, and it’s necessary to get on top of these ever-changing factors. Farm risk management systems identify, assess, and reduce potential disruptions. It helps Aussie farmers protect crops from dangers, even if some are inevitable, and give them peace of mind.

Crop insurance reimburses farmers for income lost during the season, allowing them to continue operations until the next season. Having extensive insurance coverage makes it much easier to recover.

What are the risks that Australian farmers often face? Here are the most common ones that would need crop insurance:

1. Weather

Australia is no stranger to weather patterns that can disrupt farming operations. The Bureau of Meteorology notes weather and climate as among the most significant threats for Australian farmers. It affects virtually all agricultural activities, so unpreparedness for these disasters is an automatic loss for farms..

It's tough for farmers to build their on-farm risk management to defend against every potential hazard in Australia since meteorological conditions vary widely.

2. Insects and Pests

Specific bugs can ruin a crop. Most farmers defend themselves through chemical spraying or using insect netting. Despite best efforts, pests and infestations do occasionally creep through and endanger the crop.

3. Equipment Breakdown

Modern farms rely on technology from greenhouse temperature control to tractors and harvesting equipment. If one of these systems fails, the farmer may lose hundreds of dollars in damaged or replacement fruit.

4. Variable Return Markets

Even if production runs smoothly, farmers must transport their goods and hope for a high sale price. Crop price swings are regularly influenced by global supply and demand, leaving Australian farmers powerless.

If a harvest fails in another place, demand rises, and prices go up. When other countries' harvests are high, Australian farmers' demand falls, forcing market rates to fall. Of course, this changes widely by crop and season, making it as unpredictable as the weather.

5. Malicious Damage

Australian farmers, like any other business, are prone to deceptive or fraudulent practices. Crop damage or equipment concerns may leave farmers unable to profit from the current season and risk bankruptcy.

Risk Management with Crop Insurance

When things go wrong, crop insurance is a robust risk management tool for farmers of every sector. Crop insurance benefits include payouts from coverage of basic expenses that farmers must still spend, such as mortgages and staff wages, even when earnings are low.

A predicted yield or market rates are used to inform the majority of policy decisions. Insurers step up to cover the shortfall if agricultural yields or prices fall short of expectations.

Moreover, farmers might reinvest their profits for future harvests. Crop insurance payouts provide farmers with the money they need, even if the previous season was a loss-making one, to buy fresh seeds, fertilizer, and equipment to recoup for the following one.

As a result, banks and investors place a higher value on farmers' work. Farming is a business that relies on bank loans or investments much like any other. For this reason, potential investors may see a farm without crop insurance as riskier since they don't know how farmers will recoup their losses if something goes awry.


Australian farmers rely on crop insurance as an integral part of their risk management strategy. Farm revenue changes significantly from year to year as a result of the shifting weather patterns. This is why farmers cannot depend on a constant income from year to year, thus the need for crop insurance.

New Wave Insurance is an Australian insurance firm that can provide insurance for farmers in the Gold Coast, among other financial products and services. Contact us so we can help you protect your investments more sensibly.

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