An international insurance giant has revealed plans to offer WA grain growers a harvest safety net from next year in what key industry figures have hailed as a crucial breakthrough for struggling farmers and rural communities.
The move by Swiss Re Corporate Solutions to sell crop mitigation insurance comes with many growers struggling to cope through a combination of poor harvests, falling equity and mounting debts.
Australia is one of the few major agricultural nations without crop insurance and in many countries it is backed by government funding, including in the US where it is helping farming communities survive one of the worst droughts to hit American grain growers.
Swiss Re global head of agribusiness Bernard Belk was in WA last week for meetings with farmers, banks, CBH and a group of politicians who are backing the scheme.
Mr Belk said he had been encouraged by widespread support and that if everything went to plan Swiss Re and US-based partner The Climate Corporation would be in WA in April with a crop insurance product for the local market.
He said it would be based on a Swiss Re-accepted product sold by TCC in the US, which relied heavily on cost-efficiency through the use of technology with a focus on weather readings.
CBH has agreed to back Swiss Re's plans by providing information on yields and hectares planted by growers but said it would not put any of its members' capital at risk after suffering a small loss on pilot scheme two years ago.
However, the co-operative said it believed crop insurance had the potential to benefit farmers.
Mr Belk described CBH as Swiss Re's partner of choice for distributing the insurance but said it did not need CBH to put capital on the table.
Swiss Re insures farmers and agribusiness supply chains throughout the world, including Russia, South Africa, the Ukraine, Argentina and Brazil.
Mr Belk said that based on his discussions with banks and farmers up to 20 per cent of WA's grain-growing businesses could take up insurance in the first year with that figure expected to quickly double.
Westpac head of grain Chris Moore said the bank was convinced crop insurance would put financial certainty into the industry for both farmers and lenders, and in turn boost confidence throughout rural communities.
"We would see this type of insurance for farmers as a necessary input," he said.
"If you look at any other business type - through commercial, retail, manufacturing, services - banks require insurance of a similar nature. The only exception is broadacre agriculture."
GOING WITH THE GRAIN 4300 The number of grain-growing businesses in WA