Insurance to cover weather-related losses in cereal and oilseed yields is available for the first time in the UK.
Crop Shortfall Insurance, through brokers Lycetts and Farmers & Mercantile, will automatically trigger payouts for up to 25% of a shortfall in cereals and oilseeds yields if they fall below projected production.
Total crop output or individual crops can be covered, with the payout calculated on the reduction in output based on the fall in regional yield for the harvest year, relative to the regional yield over the past eight years.
Unlike traditional insurance, where insurers must survey the damage, it allows for a quicker, and more objective, claims settlement process, says Rupert Wailes-Fairbairn, rural divisional director of Lycetts.
Cost varies regionally – for example:
- Winter wheat in Lincolnshire with an expected value of £158/t and a forecast yield of 8.17t/ha, the annual cost would be less than £2.10/t.
- In the South West, with a forecast yield of 7.53t/ha, the cost would be £1.40/t.
- For winter oilseed rape in Scotland with an expected value of £331/t and a forecast yield of 3.72t/ha, the annual cost would be less than £4.27/t.
- Spring barley in the North East at £170/t and with a forecast yield of 5.44t/ha would cost £2.44/t.
For the 2020 harvest year, winter oilseed rape cover would have to be taken by the end of September, winter barley by the end of October and winter wheat by the end of November. Spring barley would have to be in place by the end of January.