About Farm Shield

Farm Shield Mutual is a Discretionary Risk Mutual, started by a local Farmer, for the WA Farming community.

Farm Shield Mutual Limited (ACN 686 791 695)('Farm Shield Mutual') is a Discretionary Risk Mutual that is collectively owned by its Members, WA Farmers who can access its crop protection products.

What is a Discretionary Risk Mutual?

Discretionary Risk Mutuals (DRM) are:

• public companies limited by guarantee – this means there are no shareholders
• not for profit organisations
• governed by a Board of Directors elected by Members of the Mutual
• collectively owned by the Members
• required to use all assets to the benefit of Members
• issuers of risk protection products as an alternative to insurance.

Farm Shield Members

Mutuals are similar to co-operatives in that their customers are Members who are equal part owners of the organisation. Only members of Farm Shield Mutual Limited can access the Farm Shield Mutual Protections.

Members of Farm Shield Mutual are Western Australian farmers; every farmer that uses Farm Shield Crop Protection is a collective owner of the Mutual. Members will be invited to attend the Annual General Meeting of Members, able to ask questions and eligible to vote on matters presented. The details of how Farm Shield Mutual operates, and the rights of its Members are outlined in the Constitution. Any changes to the Constitution require the approval of Mutual Members.

When a farmer is accepted as Member, they can then purchase Crop Risk Protection from Farm Shield.

What is Risk Protection?

Risk protection is a discretionary product that is an alternative to insurance, it is not a contract of insurance.

Rather, risk protection is designed to protect Members of a Mutual from risks that are outlined in product disclosure statements. Farm Shield Crop Protection protects farmers from loss when damage to crops occurs from impact by hail, fire and lightning.

Members are issued quotes for their crop protection each season and each pays their contribution to Farm Shield Mutual. The amount of contribution paid reflects the value of the crops and the real risks faced by the crop and that paddock in which it is planted.

With risk protection, Mutual Members have the right to have a claim considered by the Board.

The Board has absolute discretion in respect of all claims and uses the PDS as a guide for intended protection when considering a claim. The discretion also means that if it is in the interest of Members, the Board may accept a claim which is prima facie not covered by the PDS. See the PDS for more details about Board discretion.

How is Farm Shield Mutual not for profit?

All Mutuals are not for profit entities. This means that after operating fees and claims are paid, the surplus is retained by the Mutual for the benefit of Members.

Over time, as the surplus builds, it can be used to support the launch of new products (e.g. for Frost or Farm equipment) or, be used to lower future prices for all Members.

Governance & Board Discretion

A Discretionary Risk Mutual operates a unique model:

• The Board of the Mutual considers every claim made by its Members.
• A Member has the right to have any claim considered by the Board, even if, at face value, the circumstances fall outside of the PDS.
• The Board is legally required to act in the best interest of the Mutual and its Members.
• The Board is required to and will exercise its discretion for every claim acceptance in full, part or non-acceptance.

This means that the Board considers each claim and uses its discretion to decide what is fair and what happens next. The Board cannot arbitrarily deny claims, as that is not in the best interest of the Mutual nor its Members.

The Board of Farm Shield Mutual includes Members (WA growers). Therefore, every claim is considered by a Board that understands farming and, what it means for a farmer to be in the position of having to make a claim.