New FMG product emerges from last September's storms

Federated Farmers welcomes one of the first practical measures to emerge from last September’s devastating storms in Southland and South Otago, FMG’s introduction of a ‘Livestock Catastrophe Policy’ for sheep farmers.

“Last September’s storms were the worst weather I’ve ever experienced. Not only was our lamb crop devastated but we lost invaluable capital stock in ewes about to lamb,” says Don Nicolson, Federated Farmers president.

“As a sheep farmer myself I faced a significant reduction in income with my farm’s profit potential massively reduced. It was hugely negative for the balance sheet once you factored in the loss of capital stock and equity.

“There was no insurance product to reduce farm business risk from the catastrophic stock losses we sheep farmers experienced.

“This product is a balance sheet protector and is a great risk management tool.

“As a trustee of Federated Farmers’ Adverse Events Trust, I’m pleased to see one of our supporters, FMG, launching a first of its kind in New Zealand. Effectively it’s business interruption insurance designed specifically for sheep farmers.

“Other insurance products exist in agriculture covering damage from hail or extreme frosts on crops for example, but last September’s storms exposed a real hole in the insurance market covering livestock losses.

“It’s intended to meet the unique impact natural disasters have on a livestock farmers’ bottom line. While the demand is from sheep farmers initially, it provides a basis to expand to other livestock types once the product beds down.

“Risk management is an increasingly big thing on the minds of farmers so having an option like this is a new feature in our collective toolbox.

“Federated Farmers’ Adverse Events Trust thanks the on-going support of Alliance Group, FMG, ASB Bank, Ballance Agri-Nutrients, CRT and PGG Wrightson for their practical and financial support,” Mr Nicolson concluded.