The importance of agricultural insurance in farming

Agricultural activity is fundamental for the country, whether for economic reasons or for the simple fact that it is through it that food reaches our tables. Those who work daily with life in the countryside know that there are many unforeseen events and that one of the biggest concerns concerns production losses resulting from climatic factors. The saying that agriculture is an open-air industry is increasingly valid.

With this in mind and attentive to climate change, producers are being invited to adopt a new mentality in managing crop risks. Protection mechanisms can no longer be analyzed based on the history of past events, but rather on the risks that may arise in the future. Every year, new examples arise of regions that, although they have not presented recent records of losses, have suffered some type of loss related to natural phenomena.

Faced with this complex and unpredictable scenario, private insurance called Agricultural Insurance is gaining more and more space, which offers protection against a wide range of events throughout the entire life cycle of crops.

Although still far from more developed markets such as the United States, in recent years the Brazilian agricultural insurance market has seen important advances, ranging from expanding the offer with the entry of new insurers to improving the products offered, not only in in relation to the adequacy of rates, but also in expanding the coverage levels available to producers.

There are several product and insurance options, depending on the culture and region of contracting, and coverage can range from specific risks, such as hail, for example, to more complete ones, which expand the list of risks covered or even combine , in the same policy, the two main concerns of the producer: climate and fluctuations in the price of the product.

Another important aspect is the possibility for the producer to receive a government subsidy to pay part of the insurance value (premium). Nationally, this happens through the Rural Insurance Premium Subsidy Program (PSR), of the Ministry of Agriculture, Livestock and Supply (MAPA), which can represent 35% to 45% of the total value of the policy, depending on the characteristics of the product and the insured crop. Some States also have subsidy programs that follow specific rules and are commonly complementary to the federal subsidy. It is important to note that whether or not the benefit is granted will essentially depend on the availability of resources from government agencies and also on the producer's compliance with the rules established in each of the programs.

Finally, it is essential to consider that the commercialization period for agricultural insurance follows the calendar of the harvest year. Therefore, if you are a farmer and want to reduce the risks of your farming, now is the time to learn more about the products and hire good protection.