Insurers and farmers have rubbished government suggestions that farmers should be forced to insure themselves against future outbreaks of foot-and-mouth, writes Amanda Swinburn.

Food minister Lord Whitty suggested the move in the wake of the government's compensation payouts to farmers, some of which topped £1m.

But most insurers are refusing to offer any cover for foot-and-mouth. Only 10% of farmers have been able to renew their policies and face soaring costs.

Association of British Insurers (ABI) spokesman Malcolm Tarling said there were concerns about the risks involved, particularly as there were no restrictions on the importation of live animals from abroad.

“When there are high risks, we need premiums to reflect the risk. To offer compulsory cover, there would need to be more insurers in the market, as there are currently few insurers that would see this as an excellent business opportunity,” he said.

NFU Mutual, the largest insurer of farmers, has not been taking on any new business and admitted it was planning to increase renewal rates.

The Department of Environment, Food and Rural Affairs said compulsory insurance was just one of the avenues being considered to avoid compensation payouts in the future.

Another option is the creation of a central insurance fund, into which both farmers and the government would pay.