Crop insurance

Discover crop insurance options to protect against weather, pests, and market risks. See coverage types, trends, risks, and FAQs made for Australian farmers

What is crop insurance? 

Crop insurance provides farmers with financial protection against losses due to natural disasters like droughts, floods, hailstorms, diseases, and more. It ensures the stability of farm incomes despite unpredictable environmental challenges and unforeseen events. The Australian crop insurance market is projected to grow in 2025 and beyond to reflect its increasing importance in safeguarding agricultural investments.  

Agriculture holds a significant place in Australian culture and history, with farming communities contributing to the nation's identity. Historically, the sector has endured severe difficulties. Recent events, such as the hailstorm in Queensland that destroyed a $250,000 barley crop, highlight the critical role of crops insurance in protecting farmers' livelihoods. 

Crop insurance industry trends and emerging risks 

The crop insurance industry is adapting to new challenges, driven by technological advancements, environmental factors, and economic demands. In Australia, extreme weather patterns like prolonged droughts and sudden floods are creating greater financial risks for farmers. Firms are also collaborating to show the value of advanced data in assessing farm-level threats, with other concerns like: 

  • reinsurance advancements: firms are launching crop reinsurance solutions to improve risk-sharing and expand insurance coverage for Australian farmers 

  • data-driven satellite technology: emerging collaborations focus on providing targeted protection for Australian crops, offering tailored solutions to address regional challenges 

The increasing danger of bushfires in agricultural regions highlights the importance of personalised crop insurance solutions to protect farmers from fire-related damages.  

Brokers should customise coverage for high-risk areas to make sure that farmers have full protection during tough seasons. For more specialised insurance options, brokers can explore additional policies under Farm Insurance

Crop insurance FAQs 

Can you insure a crop? 

Yes – doing so provides financial protection against losses caused by natural disasters, pests, and market fluctuations. It allows farmers to recover and sustain their operations.  

In Australia, this insurance follows the Insurance Contracts Act 1984 (Cth). This law guarantees clear and fair policies for farmers. 

What is the most expensive farm crop? 

Saffron is the world's most expensive spice due to its labour-intensive harvesting process. In Australia, cultivating saffron requires hand-picking stigmas from thousands of flowers to produce a small quantity, contributing to its high market value. 

What are common crop insurance coverage options? 

Crop insurance offers Australian farmers several coverage types tailored to different risks. Common options include: 

  • fire and hail insurance: gives targeted protection for losses caused by fire or hail 

  • revenue insurance: ensures income by covering losses from lower yields or falling market prices 

  • multi-peril crop insurance (MPCI): covers a wide range of circumstances like drought, pests, and disease 

  • single peril weather insurance: focuses on specific weather-related risks such as frost, heatwaves, or storms 

  • farm pack policies: combines crop, livestock, and equipment insurance into a single package for efficient coverage management 

How does multi-peril crop insurance differ from traditional options? 

MPCI offers broad coverage for multiple risks, including weather, pests, and disease. Traditional policies, like fire or hail insurance, cover only specific events. MPCI is ideal for farmers needing comprehensive risk management. 

Who typically needs crop insurance coverage? 

This insurance is essential for stakeholders facing various hazards. Those who typically need coverage include: 

  • commercial farmers: growers of staple and high-value crops like wheat and cotton 
  • small-scale farmers: producers of niche crops such as garlic or truffles 
  • livestock farmers: rely on crops for animal feed 
  • agribusinesses: operate in crop production and distribution 
  • farming cooperatives: manage shared agricultural risks 

This coverage guarantees financial stability in Australia’s volatile farming environment. 

What is the most profitable crop in Australia? 

Australia’s most profitable crops include wheat, cotton, and macadamia nuts. These crops benefit from high global demand and Australia’s ideal growing conditions. Specialty crops like truffles and saffron also yield significant profits due to their exclusivity and market value. 

What is the most profitable crop for 5 acres? 

High-value crops like garlic or truffles are the most profitable for small farms. They require less space and deliver higher returns per acre. 

What is the easiest crop to make money? 

Leafy greens, such as lettuce and spinach, are the easiest to grow and sell. They are fast-growing and in constant demand in local markets. 

Why crop insurance is essential 

Regardless of profitability or ease of cultivation, crops face threats from weather, pests, and disease. Crop insurance provides vital financial protection, safeguarding farmers’ investments and livelihoods. 

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