Between January and June 2021, the value of claims in rural insurance totaled R$1.7 billion, according to data from the Superintendency of Private Insurance (SUSEP). In the last 10 years, in updated values, the total amount indemnified by the insurance companies was R$ 15.2 billion.

For Guilherme Bastos, Secretary of Agricultural Policy at the Ministry of Agriculture, Livestock and Supply (SPA-Mapa) , the high volume of compensation paid to producers demonstrates that rural insurance is one of the most important instruments that producers have at their disposal to mitigate certain risks of agricultural activity. “The rural producer needs to incorporate the insurance in his production cost, it must be a permanent item in all harvests, the cost-benefit of hiring is advantageous, even more if we consider the financial assistance from the federal government in the purchase of the policy”.

The amount paid in 2021 is slightly lower than that registered in the same period of the previous year, which was R$1.8 billion. In 2020, the total amount paid by insurers to rural producers who contracted rural insurance closed at R$2.5 billion. Already

By taking out a rural insurance policy, the producer can minimize his losses in case of crop failure, by recovering the capital invested in his crop. The Rural Insurance Premium Subsidy Program (PSR) offers producers the opportunity to insure their production at a reduced cost, through financial assistance from the federal government. Currently, the premium subsidy percentage can vary between 20% and 40% of the policy value, depending on the activity and coverage contracted.

Guilherme Bastos emphasizes that rural producers need to incorporate the culture of insurance, as is already the case in other countries. “Rural insurance is an essential protection for agricultural production, it helps maintain the producer’s financial capacity in case of losses and avoids the need to renegotiate the cost of the harvest. In recent harvests there were several severe weather events in some regions of the country, that producer who had taken out the insurance was not so concerned, as the others who did not take out may have financing difficulties”.

Grant

The Map updated the data on indemnities paid by insurers to producers in 2020, within the scope of the PSR. Unlike SUSEP data, which include all insurance market operations and account for all amounts paid in 2020, regardless of the year the operation was contracted, the PSR data only considers the policies contracted with subsidy in that year, regardless of when damages have been paid.

Then we have Goiás with BRL 95.9 million, Mato Grosso with BRL 95.2 million, Santa Catarina with BRL 93.3 million and Mato Grosso do Sul with BRL 66 million.

The main climatic event that caused the losses was the drought, responsible for R$ 684 million in indemnities, just over 60% of the total indemnified. After the drought, we have the hail that caused 15.7% of indemnities, in addition to excessive rain (9.6%) and frost (9.3%). The complete PSR claims data can be found on the Map website.

Hiring

The producer who is interested in contracting rural insurance must look for a broker or a financial institution that sells rural insurance policy. Currently, 15 insurance companies are qualified to operate in the PSR. The economic subsidy granted by the federal government can be claimed by any individual or legal entity that cultivates or produces species covered by the Program and that does not have financial restrictions with the Union.

In 2021, R$ 924 million will be made available to producers to subsidize the contracting of rural insurance policies. Of this total, approximately R$ 800 million have already been used, the rest should be consumed by the end of September. Unlike previous years, when PSR resources were made available on a monthly basis, which caused a long delay in confirming the producer’s access to the Program, this year the budget was made available all at once, allowing for more speed in the process. “With this model, we gained a lot of agility, before the producer was in a queue and it could take months to find out whether or not he was awarded the subsidy, now on the same day he takes out the policy with the broker or financial institution, he can now have the answer about access to the PSR”, explained Guilherme Bastos.

For rural producers to check if their policy has been covered by the program, they just need to access  the Ministry’s website.