Government provides BRL 990 million for rural insurance for producers

The government will make R$ 990 million available over the next few months with the objective of financially assisting the producer at the time of acquiring rural insurance, according to a note from the Ministry of Agriculture.

The resources were approved in accordance with Resolution No. 93 of the Interministerial Management Committee for Rural Insurance, which approves the distribution of the budget for the premium subsidy program.

“We have seen recurring problems in production due to adverse weather events in recent crops, which are increasingly severe, so the government will continue to encourage the hiring of rural insurance”, said the secretary of Agricultural Policy of the Ministry of Agriculture, Guilherme Bastos.

The release of the resource will make it possible to support the contracting of approximately 140,000 rural insurance policies across the country, the ministry said.

In the first three months of 2022, insurers have already paid producers approximately R$5.8 billion in indemnities, mainly resulting from the losses observed in soybean and summer corn crops in the central-south region.

“This demonstrates the importance and effectiveness of insurance”, commented the director of the Department of Risk Management at Mapa, Pedro Loyola.

In 2021, the total amount paid in indemnities by insurers to producers was R$5.4 billion.

Loyola said that the ministry should soon request the supplementation of the budget for the program, due to the increase in the cost and price of the main insured products that are covered, such as soy and corn, which is reflected in the increase in the final price of the insurance. .

“In addition, as a result of the high loss ratio recorded in recent years, the premium rate for some insurances was also increased, which also makes the value of the policy more expensive and therefore requires more resources to subsidize the contracting of policies”, he said.

In 2021, Brazil suffered severe corn crop losses due to drought and frost, while in 2022 the soybean crop fell due to drought.

Of the total budget to be made available, R$ 500 million will be for winter crops (second crop corn, wheat and other winter grains), R$ 324 million for summer grains, R$ 72 million for fruits and R$ 12 million for the livestock modality. Other cultures will receive the remaining values.