North Queensland banana grower Mark Baston was just establishing his business when it was “wiped out” by Tropical Cyclone Larry in 2006.
He was almost back on his feet when TC Yasi hit in 2011 and his farms at Mission Beach and Lower Tully were debilitated yet again.
A less-resilient man might have given up, but Mark rebuilt his business and, when he heard about Redicova parametric cyclone insurance through the Australian Banana Growers’ Council, was quick to sign up in February 2022. “We can’t go through an unfunded rebuild again,” he says.
The Yasi experience taught Mark the value of risk management. He has added cattle breeding and grows pumpkins to diversity the farms’ income.
He buys Redicova as “a means to get us through until we can get payouts from other insurances” if another big blow hits his farms.
Risk mitigation
“We work hard to pay off our loans. Redicova means we don’t need to go to the bank or the government to get a loan. It’s risk mitigation.”
Mark says Yasi set his business plan back by five years. Without the availability of Redicova, he probably wouldn’t have continued to grow bananas at all, given the crop’s vulnerability to cyclonic winds.
He has also culled many older banana trees because younger trees are more resilient to strong winds.
It’s a tough market because production costs are high. Mark has eight full-time employees on his farms and says Redicova means he can keep them employed if another TC hits because they’re hard to replace.
“Redicova is value for money,” Mark says. “The terms are clear, there’s no gotcha moments, it’s a simple process, and no need for assessors.”
Mark’s family home was badly damaged by Yasi and it was 12-15 months before they received a payment from a traditional indemnity insurer. “We had no windows all that time,” he says.
Financial buffer
“When a cyclone wipes out your bananas, depending on the severity, it can be eight to nine months before you can produce again, then the prices are depressed because everyone is harvesting at the same time.”
Having a financial buffer from Redicova means Mark can structure his cropping to have fruit available when there’s less stock going to market so prices are higher.
Mark’s a third-generation banana grower who shifted north from Coffs Harbour because the tropical climate ensures the yield per acre is higher.
While he has “cried all my tears a long time ago” after the successive cyclones, Mark loves life on the farm and feels more secure with the backstop of instant cash from Redicova if another TC crosses the north Queensland coast.