CNA reinforces the need for R$1,7 billion in resources for rural insurance in 2022

The Brazilian Agriculture and Livestock Confederation (CNA) aligned with the Ministry of Agriculture the need for R$1,7 billion in resources allocated to the Rural Insurance Premium Subsidy Program (PSR), in 2022, to guarantee coverage of the planting of summer crops, which begins in September.

Of the R$990 million approved by the Rural Insurance Interministerial Steering Committee, around R$550 million has already been used to cover winter crops, such as wheat and off-season corn. In order for the insurance budget to meet at least the same demand as last year, a supplement of R$710 million will be necessary, totaling R$1,7 billion.

The matter was discussed in a meeting with representatives from the CNA and the Mapa Risk Management Department, on Tuesday (7), in Brasília.

“Like Mapa, we reinforce the need for budgetary supplementation for rural insurance, in order to maintain this risk management policy that is so important for rural producers”, stated the technical director of CNA, Bruno Lucchi.

The director of Mapa's Risk Management Department, Pedro Loyola, explained that supplementing resources is essential to cover at least the same area as last year, which reached 14 million hectares.

“With last year’s budget of R$1,18 billion, it was possible to serve 120 thousand producers, including 217 thousand policies. Based on this, we made an estimate and, considering the current scenario, the resources released for this year will only be enough to cover 8,1 million hectares, that is, it is far below the total insured in the previous year”, he said.

According to Loyola, a combination of factors means that more resources are needed to cover the same area in 2021. “The increase in production costs and commodity prices interferes with the insured value of the policies. Furthermore, the increase in accidents caused by bad weather influences the value of the policy premium (fee paid by the producer), which requires more resources to subsidize contracting”.

In 2021, the total paid in compensation by insurance companies to rural producers was R$5,4 billion. In the first three months of this year, insurance companies have already paid around R$5,8 billion in compensation.

During the meeting, actions to improve Brazilian risk management policy were also discussed. “Within this context, another demand from the sector is to ask the government that the insurance budget is not contingent to guarantee the effective allocation of resources to the PSR”, stated the technical director of the CNA, Bruno Lucchi.

The continuity of the Rural Insurance Monitor Project, the launch of the expert course by Faculdade CNA, the restructuring of the Rural Insurance Stability Fund (FESR) and the evolution of the Agricultural Climate Risk Zoning (ZARC) were also topics discussed at the meeting between the Confederation and the Ministry.