Mapa negotiates R$1,5 billion to support rural insurance contracting in 2021

Since January 2nd, producers can contact brokers, financial institutions, cooperatives and resellers to take out insurance policies under the Rural Insurance Premium Subsidy Program (PSR). There are 14 insurance companies accredited in the program, operating in all regions of the country and offering rural insurance for more than 60 crops and activities. For 2020, R$1 billion is planned for the program, the highest subsidy value since its creation. 

With the aim of continuing to promote rural insurance as the main instrument for mitigating climate risks, the Ministry of Agriculture, Livestock and Supply (Mapa) will discuss with the economic area of ​​the federal government the goal of increasing the program's budget to R$ 1,5 billion in the 2021 financial year.

Rules in 2020

New subsidy rules come into force this year, which will allow more producers to access the subsidy (see table). The estimate is to support the contracting of approximately 250 thousand policies, enabling coverage of 18 million hectares and an insured value of R$50 billion. The projection considers the behavior of contracts in previous years and may vary depending on the profile of rural insurance contracting by activity and size of producer.

Based on the adjustments made to the rules, the expectation is that 17% more producers will be covered by rural insurance in the PSR, when compared to the previous rule. For fruit crops, vegetable crops, sugar cane, livestock, aquaculture and forestry, the insurance premium subsidy increased from 35% to 40%. In addition, producers of winter crops, such as second-crop wheat and corn, will have a 40% subsidy in the multi-risk coverage type, which was previously at 35%.

For summer grains, such as soybeans and corn, and for coffee, the subsidy can vary between 20% and 30%, depending on the type of coverage and product contracted. Changes were also made to the annual financial limit per beneficiary in the agricultural modality, which went from R$72 thousand to R$48 thousand, considering that a small number of policies benefited from the higher limits and the redistribution of these values ​​will enable more farmers have access to the subsidy.

The director of Mapa's Risk Management Department, Pedro Loyola, highlighted that the simplification of the rules was approved by the Rural Insurance Interministerial Management Committee last year. “These changes meet industry demands to make insurance more accessible,” he said.

Furthermore, Mapa has projects to improve the products and services delivered by qualified insurance companies. “We are creating a rural insurance monitor in which entities will be able, with the help of Mapa, to formalize well-founded demands for the insurance market with a view to improving or developing new rural insurance products.”  

Another objective of Mapa is to raise the level of quality of services delivered by insurance companies to producers. “We will demand improvements in the stipulated coverage and productivity, as well as the services of brokers and agricultural experts. The latter will have to be part of a national registry and will undergo training and certification courses until 2022. All of these actions are part of the AGIR Program – Agro Integrated Risk Management within the scope of the Rural Insurance Promotion project”, he concluded.

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