After shivering through a cold start to this winter with blue skies and dry temperatures, some parts of Queensland enjoyed a wet week. Despite the recent rain, 57 per cent of the state remains drought declared. Large areas of central, western and southern Queensland continue to wait for much needed rain. The Bureau of Meteorology is predicting a warmer and drier winter than average and it recently declared an El Nino ‘watch’, meaning there is an increased chance of El Nino in the months ahead, so drought breaking rains may still be some way off.
The Federal Government is convening a drought roundtable in Canberra on 9 July to explore ways to support farmers enduring long periods of drought. The Intergovernmental Agreement (IGA) on National Drought Program Reform will no doubt be at the centre of the discussion. The IGA framework focuses on building resilience, preparedness and risk management.
With climate projections suggesting more frequent extreme weather events, farmers are looking to better understand, develop and adopt risk management strategies to manage uncertainty, spread risk and maintain business viability. Agricultural insurance is one underdeveloped risk management option, particularly in Queensland, that could play a greater role in helping farmers manage weather-related risks, such as drought.
The recent 2018-19 State Budget was the third consecutive Budget that QFF has called on the Queensland Government to remove stamp duty on agricultural insurance to provide viable and affordable insurance options for farmers. The Victorian and New South Wales governments have now both removed this inefficient tax, while our government continues to collect 9 per cent on the insurance premium and the GST.
Due to the limited availability and uptake of crop insurance in Queensland, the loss in tax revenue is minimal, but the returns could be substantial. QFF began advocating for the removal of stamp duty on intergeneration farm transfers in 1995 and it finally occurred in 2016. We can’t afford to wait 20 years for stamp duty on agricultural insurance to be removed.