FARMERS say the refusal by two of Australia's largest insurers to provide public liability cover for farms with coal seam gas infrastructure is "deeply concerning".
AgForce chief executive officer Michael Guerin said without insurance, farmers could not farm.
It is understood that public liability and farm business insurance policies from Insurance Australia Group (IAG), which includes subsidiaries WFI and CGU, do not cover land and water contamination. Farmers could lose their industry accreditation in the event of a spill, or gas infrastructure failure.
"This could have devastating implication for thousands of primary producers, their families, their communities and the nation itself," Mr Guerin said.
"The effects could be more disastrous to agriculture - and the economy - than COVID-19."
Mr Guerin said AgForce was working with the insurers concerned, the Australian Insurance Council, the resources sector, the Queensland Gas Fields Commission, and the State and Federal governments to ensure producers have access to adequate, affordable insurance to enable them to continue to grow food and fibre.
"With thousands of producers across the nation having to renew their insurance in a few weeks, this is a massive problem that needs an urgent resolution,"Mr Guerin said.
"This not only affects producers who currently have CSG infrastructure on their properties - a situation which is basically mandated and not voluntary - but the many on whose gas exploration is going on for future development.
"We are calling on the insurance industry to do the right thing, and for government's to mandate a solution, if necessary, to protect thousands of Australian farmers who have CSG infrastructure on their properties through no action or desire of their own."
LNP Shadow Agriculture Minister Tony Perrett said if insurance cost increased, CSG companies would need to increase compensation payments to landholders.
"If insurance becomes unobtainable then CSG companies will need to indemnify landholders, with appropriate legislative protections," Mr Perrett said.
"The LNP firmly believes that landholders must never be worse off than before any resource activities occur on their land.
"The only way the gas industry can work in Queensland is through coexistence with landholders."
Lock the Gate Alliance Queensland spokesperson Rick Humphries said public liability was just the tip of the insurance iceberg for farmers who had CSG and mining operations on their properties.
"Due to the failure of successive governments to take this matter seriously, the gas industry has been able to transfer most, if not all, of the liability and risk onto landholders," Mr Humphries said.
"Mines Minister Anthony Lynham must act now to ensure the risk and liabilities inherent in CSG development and production are shunted back to the gas industry where they belong.
"It is gas company infrastructure on these properties, and the companies should be required to insure these assets against operational and catastrophic failure.
"We urgently need a total overhaul of the Conduct and Compensation Agreement process in light of these developments. Currently these agreements do not cover these risks as they do not require gas companies to hold insurance against these risks."
There are estimated to be more than 6700 active CSG wells across inland Queensland, many of those on private property.
