Crop insurance available for second year


By Farmers Weekly staff


DALGETY Agriculture is planning to offer its crop insurance package again this harvest, despite a disappointing uptake by farmers when it was launched last year.


“We are sure this sort of risk management tool has a future, though it will take some time for farmers to get used to the idea,” says commercial director Andrew Barnard.


“The product is quite complex. I dont think we started promoting it early enough for many to take it up last autumn.”


But the US experience provides encouragement.


“Uptake was slow when this type of policy, covering both price and yield fluctuations, was launched five years ago.


“But it increased rapidly, especially as markets became more volatile.”

Dalgety Protect example
Base  
10-year regional yield 7.6t/ha
March futures price 69/t
Expected return 524.40/ha
Premium  
1.5% of expected return 7.34/ha
Insured amount  
90% of historic yield 6.84t/ha
95% of March futures 65.55/ha
Minimum return 448.36/ha

  • Farmers pay a premium of 7.34/ha to guarantee an income of 448.36/ha should the price or yield fall
  • Historic yields and % premium rates change according to the region
  • About 80% of US arable farmers now use crop insurance as a matter of course.


    Dalgety Protect will be open for applications from July to the end of October, providing cover for crops planted this autumn.


    The terms will be much the same as last year.


    Expected revenue will be based on each regions historic yield and the March 2002 futures value.


    Premiums will be taken as a percentage of this, ranging from less than 1.5% in low risk regions, such as the east midlands, to almost 4% in high risk regions, such as Scotland.


    The underwritten amount is based on 90% of the historic yield and 95% of the futures price.


    The policy will be triggered if actual revenue falls below this.


    Brussels is also understood to be examining crop insurance closely, as it looks for ways of protecting farmers when export subsidies eventually go.


    A report from a commission committee last year called for more research into the subject as a possible way of stabilising farm incomes.


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