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Brazil - MoA negotiates R$ 1.5 billion for contracting agricultural insurance in 2021

In order to continue promoting agricultural insurance as the main tool for risks mitigation relating to climate change, the Ministry of Agriculture, Livestock and Food Supply of Brazil will discuss with the federal government the increase of the insurance program’s budget to R$ 1.5 billion in the 2021 financial year. The 2020 grant regulation come into force this year, which will allow more producers to have access to the grant.

The aim is to support the contracting of approximately 250 thousand policies, making it possible to cover 18 million hectares and to reach insured amount of R$ 50 billion. Around 17% more producers are expected to be covered by insurance comparing to the previous regulation. For fruit, vegetable, sugar cane, livestock, aquaculture and forest crops, the insurance premium subsidy to increase from 35% to 40%.

In addition, producers of winter crops will have a 40% subsidy for multi-risk coverage, which was 35% before. 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 crop insured. The changes were also made in the annual financial limit per beneficiary in the agricultural modality, which shifted from R$ 72 thousand to R$ 48 thousand.

The director of the Risk Management Department at the Ministry of Agriculture, Pedro Loyola, stressed that the regulation was approved by the Interministerial Steering Committee of the Rural Insurance last year. “These changes meet the demands of the sector to make insurance more accessible,” he said. In addition, the MoA has launched projects in order to improve the products and services delivered by qualified insurance companies. “We are creating a agroinsurance supervisor in which companies, with the help of the Ministry of Agriculture, will be able to formalize demands to the insurance market to improve or develop new agroinsurance products”.

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

Source – http://boletines.latinoinsurance.com