Search for insurance help

The BOM predicts an El Niño in 2023 - What will this mean for farmers?

Farm Insurance Agribusiness Insurance Farmers Insurance Fire Protection Industry Insurance

Whilst the La Niña is expected to end by Autumn, there doesn’t seem to be any relief on the horizon from extreme weather events. That’s because the BOM has predicted that as La Niña wanes, there’s a 40% chance that it will be followed by an El Niño later this year.

The last El Niño resulted in record-breaking droughts from 2017 to 2020 and whilst drought isn’t guaranteed, it’s going to get very hot and very dry. So what happens if the BOM’s prediction of an El Niño comes true and how can our farming industry protect itself?

What happens when an El Niño follows a La Niña in Australia?

When an El Niño follows a La Niña in Australia, the impact on the country's weather patterns can vary depending on the strength and timing of the events. Typically, El Niño events are associated with drier and warmer conditions in eastern and northern Australia, while La Niña events bring increased rainfall and cooler temperatures to these regions.

If an El Niño follows a La Niña in Australia, it can mean a shift from wetter to drier conditions in some parts of the country, potentially leading to droughts and increased bushfires. In other parts of the country, the shift from a cool and wet La Niña phase to a warm and dry El Niño phase can result in a higher likelihood of heatwaves and reduced rainfall.

How can the farming industry protect its livelihood during El Nino?

The farming industry relies on the insurance industry to protect farmers from the impacts of El Niño. That’s because the right type of insurance provides financial compensation for crop damage or loss caused by droughts, bushfires or other weather-related events. This helps farmers recover their financial losses and continue their operations.

Farmers can purchase specific insurance policies for their crops or for their entire farm, which cover the costs of replanting or repairing damages incurred due to weather-related disasters. This type of insurance is particularly useful during our bushfire season, given that bushfires may be exacerbated by El Niño.

Farming insurance policies

Insurance can help the farming industry protect their farms, crops, livestock and livelihood during an El Niño, which includes droughts and bushfires, as follows.

Domestic building and contents: Protects the farmhouse and contents from fires, bushfires, theft or other damage.
Farm property: Protects all other farming buildings and structures (such as sheds, barns and shearing sheds) from fires, bushfires, floods or accidental damage.
Farming interruption: Protects cash flow in the case of a disaster (such as a severe fire or bushfire, hail storm, flood or drought); when the farm can no longer operate.
Multi-peril crop: Protects farmers when their crops are assaulted by multiple disasters, for example, insects, disease, fire, bushfires, droughts, frost or floods.
Machinery breakdown: Protects against the breakdown of farm machinery, for example, milking pumps, water pumps, diesel machinery and so on.
Livestock: Protects farmers against fire or theft of livestock and feed.
Fencing: Protects against damage to fences caused by storms, hail, fire, bushfires and floods.
Personal income: Protects farmers against personal injury resulting from a work-related accident that prevents them from working for some time.
Public & Products Liability: This policy covers farmers for third-party injuries on their property as well as damage caused to others.

Drone Insurance

Simple affordable public liability and material damage cover for commercial drone operators.

Details Get a quote

Cyber Liability Insurance

Cyber Liability Insurance is designed to help protect you from claims and support your profitability in the event of a cyber breach or attack.

Details Get Quote

Public Liability Insurance

Public Liability insurance is there to provide protection if someone makes a claim against the insured, the business or its employees.

Details Get Quote

Domestic building and contents: Protects the farmhouse and contents from fires, bushfires, theft or other damage.
Farm property: Protects all other farming buildings and structures (such as sheds, barns and shearing sheds) from fires, bushfires, floods or accidental damage.
Farming interruption: Protects cash flow in the case of a disaster (such as a severe fire or bushfire, hail storm, flood or drought); when the farm can no longer operate.
Multi-peril crop: Protects farmers when their crops are assaulted by multiple disasters, for example, insects, disease, fire, bushfires, droughts, frost or floods.
Machinery breakdown: Protects against the breakdown of farm machinery, for example, milking pumps, water pumps, diesel machinery and so on.
Livestock: Protects farmers against fire or theft of livestock and feed.
Fencing: Protects against damage to fences caused by storms, hail, fire, bushfires and floods.
Personal income: Protects farmers against personal injury resulting from a work-related accident that prevents them from working for some time.
Public & Products Liability: This policy covers farmers for third-party injuries on their property as well as damage caused to others.

For help putting together a suitable farming insurance package for your business, talk to an insurance specialist today and find your local adviser.

Farm insurance farm farming

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Insurance Advisernet, ABN 15 003 886 687, AFSL 240549

This article originally appeared on Insurance Advisernet News and has been published here with permission.