Agricultural Insurance: Benefits and How It Works

Agricultural Insurance: Benefits and How It Works

Agricultural insurance is insurance that guarantees compensation for the risk of crop failure due to uncertain natural conditions. Not only in agriculture, but this type of insurance is also available for fishermen. It’s just that the difference for fishing customers is life insurance protection while at sea.

The following is a list of agricultural insurance policies in Indonesia:

Understanding Agricultural Insurance

Agricultural insurance is an insurance product that guarantees the risk of loss in farming. This farmer insurance program was initiated by the government to improve the welfare of farmers who have experienced many problems with crop failure.

This is because agriculture is a risky sector. After all, it is highly dependent on natural conditions. Drought and rainfall are too high until the attack of pests and diseases can damage crop commodities that are developing. Of course, this is a big problem in today’s era, where natural conditions are no longer predictable.

Not only farmers, but this insurance also has a policy that targets fishermen in the form of life insurance. This policy provides compensation to families of fishermen who have an accident during work, for example, while at sea.

Practical purchases can be online

Agricultural Insurance Benefits

Several benefits can be obtained by buying insurance products for these farmers. The following is a list of agricultural insurance benefits that will be very beneficial for customers:

  • Managing the risk of crop failure
  • To continue production in the next season
  • Avoiding debt to middlemen
  • Feel calm
  • The compensation value is good
  • Practical purchases can be online

Agricultural Insurance Premium

Agricultural insurance premiums are one of the determinants of the value of compensation or claims. The price of agricultural insurance premiums depends on the object of coverage, namely the area of ​​​​rice fields and the number of cows for livestock insurance.

The following is a list of subsidized agricultural insurance premium prices:

  • Rice Farming Business Insurance (AUTP): IDR 36 thousand per hectare
  • Cattle Farming Insurance: IDR 40 thousand per head
  • Fisherman Farm Insurance: free

Premium Calculation Simulation

To better understand how to calculate agricultural insurance premiums, the following is an illustration of the calculation quoted from the Ministry of Agriculture website for subsidized agricultural insurance premiums:

  • Production cost per growing season: IDR 6 million
  • Insurance premium: 3 percent of production cost

3/100 x IDR 6 million = IDR 180 thousand / 1 hectare (ha)The government subsidy is 80 percent, so farmers only pay 20 percent.

The calculation of the agricultural insurance premium to be paid is:

20/100 x IDR 180 thousand = IDR 36 thousand / 1 hectare (ha)

Premiums paid by farmers:

  • Premium per 2 ha = IDR 72 thousand
  • Premium per 1 ha = IDR 36 thousand
  • Premium per ha = IDR 18 thousand
  • Premium per ha = IDR 9 thousand

Agricultural Insurance Mechanism: Premium Scheme

The premium scheme also has several conditions that must be met by the prospective insured. The premium scheme consists of two types, namely self-help premiums, and subsidized premiums.

The following is an explanation of the agricultural insurance mechanism for the premium scheme and the conditions that must be met.

Self-help premium scheme

The self-help premium scheme consists of three schemes, namely independent, partnership, and credit. Here’s the review.

Independent

If the farmer chooses to pay insurance through this type, the farmer must pay the full contribution and not be assisted by other parties. Because this type is done independently of course all payments are also made privately.

Partnership

In contrast to the above type, in this type, the farmer does not pay in full alone. However, in this type, the farmers will be assisted by a partnership company. If you choose this type, the payment will be made under the agreement that has been determined and agreed upon by both parties.

Credit

This type will be adjusted to the amount of credit made by farmers. So farmers will only pay according to the amount of credit.

Fund Subsidy Premium Scheme from APBN

Premium payments through this type have higher difficulties than others. In this premium scheme, farmers have to go through various existing rules.

Why is that? Because the government has a burden of 80 percent of premium payments and the remaining 20 percent is borne by farmers.

The system that is owned is quite simple because the registration is done through existing farmer groups making it easier for farmers to register. However, in carrying out the various series above, farmers must meet several conditions that have been provided.

  • If the farmer is a sharecropper, the farmer does not own a private farm. Cultivated land should also not exceed two hectares.
  • If the farmer owns private land, the working area is not more than two hectares
  • Are horticultural farmers, gardeners, or breeders on a small scale.
  • Farmers who wish to join insurance must have joined a farmer group and are active members of the group.
  • This acceptance will prioritize farmers who are included in sustainable food agriculture
  • If farmers receive premium assistance, then farmers must carry out farming or animal husbandry well and seriously.

How to Claim Agricultural Insurance

The procedure for paying agricultural insurance claims is carried out in two stages. The first is that the farmer fulfills the conditions of the claim. Second, the insurance company approves the claim after examining the claims submitted.

The following is a review of the procedure for resolving Agricultural Insurance claims. Complete!

Claim terms

In the event of a risk to the insured crops, crop damage or crop failure can be claimed.

AUTP claim terms

How to Apply for Agricultural Insurance

Agricultural insurance mechanism to register there are two ways. How this list depends on the type of insurance selected. Here’s the explanation!

1. List of subsidized agricultural insurance

2. List of Jasindo private agricultural insurance

Tips for Choosing Agricultural Insurance

Having agricultural insurance will certainly be very profitable for farmers and fishermen. Because you will be protected if the harvest fails or performs work activities. For that, for those of you who want to have insurance for farmers, here are tips for choosing it.

  1. Choose the Policy as Needed
  2. Choose the Registration Process and Easy Claim Method
  3. Choose a non-burdening agricultural insurance premium
By aamritri

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