Producers received R$925 million in rural insurance compensation in 2018

The rural producers received last year R$925 million in rural insurance indemnities, contracted with the assistance of the Rural Insurance Premium Subsidy Program (PSR). The main event that caused crop losses was the drought, with the payment of around R$660 million to compensate producers, followed by the occurrence of hail, which caused losses in production with compensation of R$201 million to producers.

The calculation of these indemnities covers the contracting of PSR policies, equivalent to 45% of all rural insurance operations contracted in 2018 in the modalities subject to subsidy.

Of the total resources paid by insurance companies, 36% went to producers in Paraná, 21% in Rio Grande do Sul, 11% in Goiás, 11% in Mato Grosso do Sul, 8% in São Paulo and the remainder to producers in other states.

For the director of Mapa's Risk Management Department, Pedro Loyola, the total amount compensated by insurance companies in 2018 demonstrates the importance of insurance for producers and consolidates the PSR as one of the pillars of agricultural policy. "In the government's view, transferring the risk of agricultural activity to the insurance market is the best path to be followed and the PSR has helped producers to mitigate production losses, maintaining a stable cash flow and avoiding debt renegotiations ", he evaluates.

Grants

In 2018 the federal government disbursed R$370 million to subsidize the contracting of 63 thousand policies with a total insured value of R$12 billion. 

“Rural insurance is an instrument that reduces producer losses in the event of crop failure due to adverse weather conditions and the government will continue to encourage its contracting within the vision of an integrated agricultural risk management policy, which offers the Agricultural Zoning of Climate Risk as one of the instruments to help producers in harvest planning”, says Loyola.

For 2020, a record budget of R$1 billion is planned for the PSR, enabling rural insurance with subsidies to reach more than 200 policies. Producers interested in taking out rural insurance should look for a broker or financial institution that sells rural insurance policies. Currently, 14 insurance companies are authorized to operate in the PSR.