Between January and June 2021, the value of rural insurance claims totaled R$1,7 billion, according to data from the Private Insurance Superintendency (Susep). Over the last 10 years, in updated values, the total amount compensated by 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. “Rural producers need to incorporate insurance into their production costs, it must be a permanent item in all harvests, the cost-benefit of contracting it is advantageous, even more so if we consider the financial assistance from the federal government in acquiring the policy”.
The amount paid in 2021 is slightly lower than that recorded in the same period of the previous year, which was R$1,8 billion. In 2020, the total amount paid by insurance companies to rural producers who took out rural insurance was R$2,5 billion. Already
By taking out a rural insurance policy, producers can minimize their losses in the event of a crop failure, by recovering the capital invested in their crops. 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 insurance culture, 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 the event of losses and avoids the need to renegotiate the cost of the harvest. In recent harvests, several severe weather events occurred in some regions of the country, the producer who had taken out the insurance was not so worried, while the others who did not take out the insurance may have had financing difficulties”.
Mapa updated data on compensation paid by insurance companies to producers in 2020, within the scope of the PSR. Unlike the Susep data, which cover all insurance market operations and account for all amounts paid in 2020, regardless of the year the operation was contracted, the data released by the PSR only consider policies contracted with a subsidy in that year, regardless of when compensation was paid.
In total, R$1,1 billion in compensation was paid by insurance companies to producers who took out policies in 2020 with support from the PSR, compensation was paid to producers in all regions of the country. The three states with the most compensation were Paraná (R$286,5 million), Rio Grande do Sul (R$268,4 million) and São Paulo (R$147,9 million).
Next we have Goiás with R$95,9 million, Mato Grosso with R$95,2 million, Santa Catarina with R$93,3 million and Mato Grosso do Sul with R$66 million.
The main climate event that caused the losses was the drought, responsible for R$684 million in compensation, just over 60% of the total compensation. After the drought, we have hail that caused 15,7% of compensation, in addition to excessive rain (9,6%) and frost (9,3%). Complete PSR claims data can be consulted on the Mapa website.
Producers interested in taking out rural insurance should look for a broker or financial institution that sells rural insurance policies. Currently, 15 insurance companies are authorized to operate in the PSR. The economic subsidy granted by the federal government can be requested 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 has already been used, the remainder should be consumed by the end of September. Unlike previous years, when PSR resources were made available monthly, which caused a long delay in confirming the producer's access to the Program, this year the budget was made available all at once, enabling the process to be faster. “With this model we have gained a lot of agility, before the producer would be 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.
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