Agricultural insurance: what is it and why is it important to have this coverage? | News

Agriculture is one of the most relevant activities for the country’s economy and the Covid-19 pandemic harmed many men and women who cultivate and supply food to Peruvians, Mapfre said.

According to information from the Ministry of Agriculture, an estimated loss of more than 1.5 million soles in agricultural GDP due to the health emergency, he stressed.

There are many factors that can cause damage to agriculture; However, there are very useful favorable options, for example, agricultural insurance, mentioned the technical director of Mapfre, Antonio Clemente.

These (agricultural insurance) are financial instruments that mitigate the impact of negative events in the fields, in addition to strengthening defenseless producers, he explained.

“This type of insurance covers the damages that the land may suffer against various risks, mainly climatic, and, like all insurance, it has the purpose of leaving the farmer in the same situation in which he was before the occurrence of the accident,” he said. .

He then commented that the Catastrophic Agricultural Insurance is a program 100% subsidized by the Government and that it is aimed at insuring subsistence farmers (micro and small).

This initiative began 12 years ago, initially eight regions located in the highlands of Peru were insured, he said.

“Over time, the number of regions was expanded and in the 2020-2021 bidding period, the 24 departments were included.”

At the beginning of the year, around 1,500 Peruvian farmers benefited from Catastrophic Agricultural Insurance, he said.

Coverage and compensation

As these insurances are called “catastrophic”, the coverage is activated when the losses in crop yield exceed the percentage set in the policy as a limit, he explained.

“This being the case, to determine compensation, a calculation is made by multiplying the amount of area sown to the crop within the statistical sector by 650 soles, which is the sum insured per hectare,” he indicated.

“Once it is ruled as compensable, the statistical sector makes a list of beneficiaries and the payments are channeled through the Banco de la Nación.”

Access to agricultural insurance

At another point, he pointed out that in order to access private agricultural insurance, the insured must fill out an insurance application and provide personal information to the insurer so that they can assess the risk and can present a proposal.

In the case of Catastrophic Agricultural Insurance (SAC), as it is a program that is 100% subsidized by the government, the Ministry of Agriculture is the one who sets the conditions and a tender is carried out, he said.

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Published: 9/17/2021



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