Have you heard of Agricultural Insurance? As an agricultural country, the majority of Indonesia’s population works as farmers. As you know, the productivity of a farmer is highly dependent on nature. If the natural conditions are good, then the land can be cultivated optimally and agricultural products can be utilized properly. But if nature is not friendly, big losses are inevitable.
Many natural disasters that cause crop failure are very likely, including irregular rainy seasons, floods, landslides, disease outbreaks, and pests that destroy crops. This risk results in huge losses for our farmers.
Farmers generally take shortcuts and borrow money from intermediaries to fix crop failures. And if the product is successful, the intermediary buys the product at a very low price to repay the money the farmer borrows. This is very detrimental to farmers. Fortunately, there is now a solution for farmers to protect their produce from unforeseen harm: agricultural insurance.
What is Agricultural Insurance? Agricultural insurance is insurance that covers all risks of loss in agriculture, livestock, and fisheries. Thus, insurance covers not only agricultural losses, but also livestock and fisheries. In some developed countries such as the United States, Japan, and several European countries, agricultural insurance has developed rapidly and is effective in protecting farmers.
Form of Agricultural Insurance Coverage – Compensation for damage caused by crop failure and other causes. Thus, farmers no longer need to borrow money from intermediaries because the state compensates if there is a risk. The government replaces the capital of farmers and farmers can continue their agricultural activities.
Types of Agricultural Insurance
There are two types of agricultural insurance. That is:
1. Plant Insurance
This type of insurance protects against all risks arising from farming, horticulture, and agriculture.
2. Livestock Insurance
On the other hand, livestock insurance protects the livestock industry in the form of non-ruminants and monogamous ruminants.
What are the benefits of Agricultural Insurance?
Agricultural insurance benefits include:
1. Agricultural Bankruptcy Protection.
The main benefit of agricultural insurance is protection or protection against all types of risks that arise in agriculture, such as crop failure. Of course, farmers will not be harmed in the event of crop failure, because the entire capital will be replaced by the insurance.
2. Large Indemnity Value
The amount of compensation that will be given by the insurance company to farmers who suffer losses is quite large. Farmers can start cultivating their land and gardens again without having to borrow capital from middlemen. The value of compensation provided by the insurance company is also greater than the number of loans generally given by middlemen.
3. Ease of buying insurance
To get insurance, farmers can easily register. Typically, farmers are registered with the local government and then stored in a district or city database, the latter being transferred to the province through the general office until it is received by the Ministry of Agriculture. The Regional Office will guide farmers through the registration form for prospective insurance users. Filling out the form is not difficult because a dedicated team will accompany you throughout the process.
4. There is a subsidy to pay premiums.
Farmers do not need to worry or fear the high insurance premiums. This is due to subsidies or support from the government which reduces insurance premiums every month. Currently, agricultural insurance premiums are paid by the Ministry of Home Affairs and Communications, provincial offices, and municipal offices.
Meanwhile, Winarno argues, to make this agricultural insurance more successful, agricultural extension workers must also obtain clear information. That way, farmers can access new information.
Winarno also explained that currently, the number of agricultural extension workers is still very limited. Sometimes, there is still one extension worker who handles two to three villages. Therefore, self-help extension workers must take part in this program.
