CMI hits a hurdle

13 Jun, 2013 04:00 AM
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Supprters of Crop Mitigation Insurance ...  Bernard Belk (left), Swiss Re, David Friedberg CEO & Co-founder The Climate Corporation (TCC), Andy Leventhal, TCC, Stephen Strange, Bruce Rock, Nigel Hallett, Member for South West and Philip Gardiner, Moora, in Bruce Rock recently.
Supprters of Crop Mitigation Insurance ... Bernard Belk (left), Swiss Re, David Friedberg CEO & Co-founder The Climate Corporation (TCC), Andy Leventhal, TCC, Stephen Strange, Bruce Rock, Nigel Hallett, Member for South West and Philip Gardiner, Moora, in Bruce Rock recently.

CROP Mitigation Insurance (CMI) is under threat of not being available for another year due to internal State Government delays.

The next four to six weeks appears to be a crucial period for CMI to be in place for next season.

And industry is relying on the State Government to make it happen, but State Government delays are making it difficult for key commercial players to be able to get a program up and running for the next growing season.

CMI has been labelled a game changer by WA's largest grain grower John Nicoletti and Member for South West Region Nigel Hallett and a key pillar in ensuring the long term sustainability for many grain growers.

Commercial interest has already been shown in delivering a CMI product to WA through US-based The Climate Corporation (TCC), a partner of international agri-food company Swiss Re, and Canadian private equity company Latevo International.

But it appears both companies are having issues with getting the products available to farmers.

TCC is understood to be not satisfied with WA's weather data and wants Doppler Radar Technology to provide a more detailed report on weather patterns in WA.

The technology is already being used in the US, but WA appears to be well behind that technology with former Agriculture and Food Minister Terry Redman's weather stations solution believed to be yesterday's technology.

Two weeks ago, Mr Hallett wrote to current Agriculture and Food Minister Ken Baston regarding CMI and asking the State Government to invest $2 million in setting up two Doppler radar stations and provide soil mapping data through Landgate.

Mr Hallett also reiterated the urgency of the matters.

Failure to get the State Government funding would put TCC's plans at serious risk and doubt would be cast over CMI in WA for at least another year.

When Farm Weekly spoke to Mr Baston this week, he was unable to make any financial commitment because the State Government was still going through the budgetary process.

Mr Baston also met with Swiss Re on the company's latest visit to WA last month.

"I am very impressed (with what I was presented with by Swiss Re) and I believe there is definitely a place for CMI," Mr Baston said.

"At this stage, State Government is certainly not subsidising CMI.

"I believe we are very close to it being another tool for farmers to look at in making their business decisions on their farm."

The State budget is set to be released on August 8, but it is understood that that date would almost be too late for the potential insurers.

But Mr Baston said the urgency had been pointed out to him.

Farm Weekly understands that Latevo is also having issues with submissions from farmers for its revenue-based insurance with its $3000 up-front fee.

Latevo has proposed that the funds from the Commonwealth Government's $60m assistance package be used for a $3000-$5000 professional services low-interest or no-interest loan or grant and for CMI to be used as security for a business loan.

Mr Hallett highlighted the issue in his letter on May 31 to Mr Baston but when Farm Weekly spoke to Mr Baston he said he was unaware of the issue.

He admitted it was unlikely, as getting the Federal assistance package was proving to be hard enough.

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And what return will they get ? perhaps 2% on capital invested , there are a lot of better
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Property prices should really be in respect of what they(the property) produces as a business,
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Bushie, did you see the comments by JT about big mouth farmer haters who cant substantiate their