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

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

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.

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

Important Information 

This communication including any weblinks or attachments is for information purposes only. It is not a recommendation or opinion, your personal or individual objectives, financial situation or needs have not been taken into account. This communication is not intended to constitute personal advice. This type of insurance product is designed for small and large businesses, that want to be covered against financial loss relating to accidents or personal injury involving contractors or sub-contractors.

We strongly recommend that you consider the suitability of this information, in respect of your objectives, financial situation and needs before acting on it. This document is also not a Product Disclosure Statement (PDS) or a policy wording, nor is it a summary of a particular product’s features or terms of any insurance product. If you are interested in discussing this information or acquiring an insurance product, you should contact your insurance adviser to obtain and carefully consider any relevant PDS or policy wording before deciding whether to purchase any insurance product.

Liability Insurance

Liability Insurance

Despite the very best of intentions, accidents can still happen in any business. Public and Product Liability Insurance  protects you against claims for personal injury or damage to a third party.

Business Interruption Insurance

Business Interruption Insurance

From your family and employees to customers and suppliers, there are a lot of people who depend on your business opening its doors each day.