What are the Benefits and Uses of Having Agricultural Insurance?

What are the Benefits and Uses of Having Agricultural Insurance?

What is Agricultural Insurance?

Agricultural insurance is insurance that covers all risks of loss in farming, livestock, and fisheries. So not only agricultural losses are covered, but livestock and fishing are also covered by insurance. In developed countries such as the United States, Japan, and some European countries, agricultural insurance is growing rapidly and is effective in protecting farmers.

The form of coverage of agricultural insurance is compensation due to crop failure and other causes. So when there is a risk, farmers do not need to borrow money from middlemen anymore because the government will compensate for the loss. The government will replace the capital of farmers and farmers can continue their farming activities.

Types of Agricultural Insurance

There are 2 types of agricultural insurance, namely:

Insurance for Plants

This type of insurance protects against all risks that occur in food crops, horticulture, and plantations.

Insurance for Livestock

Meanwhile, livestock insurance protects livestock businesses in the form of non-ruminants and monogastric.

What are the Benefits and Uses of Having Agricultural Insurance?

Some of the benefits that can be felt when having agricultural insurance include:

Protection Against Agricultural Failure

The main benefit of agricultural insurance is get protection or protection against all kinds of risks that occur in agriculture, such as crop failure. Of course, farmers will not be harmed if the harvest fails, because all the capital will be replaced by insurance.

Large Indemnity Value

The value of compensation provided by the insurance company to farmers who suffered losses was quite large. Farmers can restart their land and gardens without having to borrow capital from middlemen. The value of the compensation provided is also greater than the number of loans that are generally given by middlemen.

Ease of Registering as an Insurance Member

To get insurance, farmers can register easily. Generally, farmers will be recorded by the local office, then stored in the Regency or City Government Database which will be continued to the Province until the last it will be received by the Ministry of Agriculture through the Directorate General.

Furthermore, the farmers will be accompanied by the local office in filling out the registration form for prospective insurance users. There is no difficulty in filling out the form because the whole process will be assisted by a special team.

There is a Premium Payment Subsidy

Farmers need not worry and fear being charged with high premium fees. This is because there are subsidies or assistance from the government that reduce the number of premiums each month. Currently, the payment of agricultural insurance premiums has involved the Directorate General, Provincial Offices, and Regency/City Offices.

Obstacles

Although agricultural insurance has provided various conveniences to farmers, including premium relief, in practice, there are still obstacles. Some of these obstacles include:

  • The low awareness among farmers and ranchers on the importance of having agricultural insurance.
  • The level of welfare of farmers and ranchers is still relatively low and weak
  • There are still many farmers and ranchers who have not been accessed by financial institutions, both banks, and non-banks.

To deal with this, further counseling and socialization from the local office are needed so that all farmers are touched by the insurance program. The goal is that if there is a loss, farmers will no longer borrow capital from middlemen who harm.

Those are some things about agricultural insurance that you need to know, beyond the information you can find in papers, journals, and other official sources. If you need more insurance information, you can find a variety of interesting literature ranging from agricultural insurance to retail (or retail) insurance. Then choose an insurance product according to your needs. The product choices are diverse, ranging from health insurance, life insurance, motorcycle, and car insurance, to smartphones. Easy premium payment and the policy will be sent directly to your email. It’s so easy!

By aamritri

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