Mapa announces the release of R$990 million for rural insurance

The Ministry of Agriculture, Livestock and Supply (Mapa) published this Tuesday (17/05) the Resolution No. 93 of the Rural Insurance Interministerial Steering Committee, which approves the distribution of the budget for the Rural Insurance Premium Subsidy Program (PSR) for the 2022 financial year. In total, R$990 million will be made available over the next few months with the aim of financially assist the producer when purchasing rural insurance. 

Mapa's Secretary of Agricultural Policy, Guilherme Bastos, highlights the importance of insurance to mitigate the effects of the weather during the harvest. “We have observed recurring problems in production due to adverse weather events in recent harvests, which are increasingly severe, which is why the government will continue to encourage the taking out of rural insurance,” he says. 

In the first three months of 2022, insurance companies have already paid producers approximately R$5,8 billion in compensation, mainly resulting from claims observed in soybean and summer corn crops in the Center-South region. "This demonstrates the importance and effectiveness of insurance”, assesses the director of Mapa's Risk Management Department, Pedro Loyola. In 2021, the total paid in compensation by insurers to producers was R$5,4 billion.

Loyola adds that Mapa should soon request a budget supplement for the Program, due to the increase in the cost and price of the main insured products that are included in the PSR, such as soybeans and corn, which is reflected in the increase in the final price of insurance. "Furthermore, as a result of the high accident rate recorded in recent years, the premium rate for some insurance policies has also been increased, which also makes the value of the policy more expensive and consequently requires more resources to subsidize the contracting of policies", he points out. 

The release of the R$990 million resource will enable support in the contracting of approximately 140 thousand rural insurance policies across the country. The novelty is that the insured area will be georeferenced from 2022 within the scope of the PSR, aiming to improve mapping and satellite monitoring information to cross-reference information with other databases.

Of the total budget to be made available, R$500 million will be for winter crops (2nd harvest corn, wheat and other winter grains), R$324 million for summer grains, R$72 million for fruits, R$ 12 million for livestock, R$ 2 million for forestry and R$ 80 million for other crops.

In relation to the budget allocated for summer grains, part of this resource (R$ 60 million) will be exclusive to contracts carried out in the North and Northeast Regions. This budgetary highlight, which has been taking place since 2019, has the purpose of promoting the offer of insurance in those regions, which is still in its infancy, and stimulating demand from producers, who, unlike other regions of the country, are not yet accustomed to hiring the safe. In 2021, it was possible to boost the contracting of 3.310 policies, 102% more than 2019. The amount insured in these Regions increased by 167%, going from R$1,05 billion in 2019 to R$2,8 billion last year. 

Hiring  

Producers interested in taking out rural insurance should look for a broker or financial institution that sells rural insurance policies. Currently, 16 insurance companies are authorized to operate in the PSR.

Rural insurance is intended for producers, whether individuals or legal entities, regardless of access to rural credit, who cultivate or produce species covered by the Program.

Since the beginning of this year, the premium subsidy percentage has been fixed at 40% for all crops/activities, except for soybeans, whose percentage remains fixed at 20%. This rule applies to any type of product and coverage, according to PSR rules, which can be accessed here. 

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