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Agricultural Insurance: Benefits and How It Works

There are more and more insurance products available today. However, not everyone knows the types of insurance products, such as agricultural insurance. Have you heard of it?

As the name implies, agricultural insurance is intended for farmers to ensure their welfare of farmers in case of crop failure at any time. Some of the causes, such as rainfall that is too high, pest attacks, and soil conditions that are not suitable for farming.

There are more and more insurance products available today. However, not everyone knows the types of insurance products, such as agricultural insurance.

Agricultural Insurance Benefits

As the name implies, agricultural insurance is intended for farmers to ensure their welfare of farmers in case of crop failure at any time. Some of the causes, such as rainfall that is too high, pest attacks, and soil conditions that are not suitable for farming.

The following benefits can be obtained from agricultural insurance:

The crop failure protection name works, of course, there are risks. This risk is also often experienced by farmers, namely crop failure. 

With agricultural insurance, farmers’ agricultural products are protected by insurance companies. In the event of crop failure, the capital to replant will be financed by insurance.

Compensation due to crop failure

Farmers who experience crop failure, of course, suffer huge losses. Starting from seeds, agricultural tools, and fertilizers which if calculated are quite a number.

Fortunately, with agricultural insurance, losses due to crop failure will be covered by the insurance company. The cost of compensation is certainly greater than the compensation provided by local middlemen.

Maintain the prosperity of farmers

Starting from providing compensation costs to capitalizing on farming activities that fail to harvest, insurance will provide these benefits if farmers have agricultural insurance. 

Agricultural insurance is expected to increase the prosperity of farmers. When farmers prosper, the people also prosper because they have no trouble finding food. The price is also affordable because of the abundance of crops.

Agricultural Insurance Premium Calculation

For subsidized agricultural land, the illustration of the premium paid with the following illustration:

  • Insurance premium of 3% of production cost
  • Production costs of Rp. 8 million

Calculation:

= 3% x IDR 8 million = IDR 240 thousand/hectare

The government subsidy is 80%, which is Rp. 192 thousand. Thus, farmers only need to pay the remaining 20%, which is 48 thousand. 

The premium payment above is adjusted to the land area (in hectares). The wider the agricultural land, the more expensive the insurance premium paid.

How to Buy Agricultural Insurance

For subsidized agricultural land, the way to buy insurance is as follows:

  • Farmers are required to participate in farmer data collection conducted by the local district office
  • The results of the data collection will be sent to the Ministry of Agriculture
  • Farmers fill out insurance registration forms, then verify data
  • Participate in socialization about premiums and how to pay them
  • The policy will be issued, and the farmer can file a claim if he suffers a certain amount of loss when the policy is issued

For Jasindo’s private agricultural land, how to buy insurance is as follows:

  • Contact customer care service at the phone number or via email
  • Express a desire to open agricultural insurance
  • Fill out the registration form provided, then attach the required documents
  • The process of signing the policy which indicates if the policy is active and can be used

How to Claim Agricultural Insurance

If the risk occurs in the insured plant, the farmer can submit a claim under the following AUTP provisions:

  • The insured conveys the risk of plant damage to the officer
  • The officer and the insured fill out form-6 together through the SIAP application for a maximum of 6 working days
  • The insured keeps evidence of crop damage until the officer determines the value of the loss. The Insured can replant, but by attaching photo evidence through an open camera 
  • Officers will provide several suggestions to anticipate wider damage
  • Carry out the necessary controls with officers from the agricultural service
  • If the damage is irreparable or severe, compensation will be calculated
  • The insured fills out and signs the official report containing the results of the inspection of damaged plants. These minutes will also be signed by the parties involved

Tips for Choosing Good Agricultural Insurance

Pay attention to needs

Just like health or life insurance, you need to adjust the product to your needs so that the insurance benefits are maximized. See what incident coverage is needed. 

Easy registration and claim

An easy-to-trust registration process saves time and effort, as well when filing a claim. Choose the easiest way so you don’t have trouble doing it yourself later.

Financially appropriate premium

The last tip is to always adjust to financial conditions, even though the cost of agricultural insurance premiums is affordable. Don’t let premium payments interfere with your financial condition. 

Expand Information about Agricultural Insurance

Considering that agricultural insurance is still rarely heard of and not many people know about it, you should get more information about the product before deciding to buy it. Take advantage of Google or social media to maximize information, so you are not at all blind to the insurance product.

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