Government releases record budget for Rural Insurance Program in 2020

The Ministry of Agriculture, Livestock and Supply (Mapa) published on Tuesday, June 23, the budget release schedule for the Rural Insurance Premium Subsidy Program (PSR) in 2020 (Resolution nº 74). Of the total amount to be released, R$280 million will be allocated to contracting policies for winter crops, such as 2nd harvest corn and wheat; R$535 million for soybean crops, 1st harvest corn, rice, beans and coffee; R$70 million for fruits; R$10 million for livestock farming; R$10 million for forestry and R$50 million for other crops.

“With this support from the Federal Government, it will be possible to encourage the contracting of approximately 220 thousand policies, providing coverage for 15 million hectares and R$43 billion in insured value”, highlights the director of Mapa’s Risk Management Department, Pedro Loyola .  

Another highlight is the allocation of an exclusive budget of R$50 million for the contracting of grain policies in the months of September and October in the North and Northeast regions. This measure, which began in 2019, aims to boost hiring in these regions. “Insurance contracting is still concentrated in the states of the Center-South of the country, it is necessary to increase the offer of insurance in other regions, with the insertion of new insurance companies, creation of new distribution channels, whether in financial institutions, cooperatives, resellers of inputs, in addition to increasing the number of specialized insurance brokers operating in this market. In 2019, we managed to double the number of hires compared to the previous year. We hope that in 2020 the result will be even more significant”, he explains.

R$50 million will also be allocated for a pilot project that should serve producers included in the National Program for Strengthening Family Agriculture (Pronaf). According to Loyola, this initiative aims to provide this specific audience with better conditions when taking out insurance. “We need to create different conditions for this producer profile to start taking out insurance. We will soon release details of the project.”

The schedule was approved during the last meeting of the Interministerial Rural Insurance Steering Committee (CGSR), held on June 22, when the Resolution No. 73, which defined new operational rules for insurers qualified in the PSR. 

Climate is the main risk factor for rural production. By taking out a rural insurance policy, producers can minimize their losses by recovering the capital invested in their crops. Since 2005, the federal government, through the PSR, has assisted producers in acquiring rural insurance, paying part of the policy value (premium).

Hiring Rural Insurance 

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. The economic subsidy granted by the Ministry of Agriculture can be requested by any individual or legal entity that cultivates or produces species covered by the Program. For grains in general, the premium subsidy percentage can vary between 20% and 40%, depending on the crop and type of coverage contracted. In the case of fruits, vegetable crops, sugar cane and other types (forests, livestock and aquaculture), the percentage of subsidy to the premium will be fixed at 40%.