Insurance companies paid R$2 billion until October in compensation to producers for production losses

by Denise Bueno

The Rural Insurance Economic Subsidy Program reached 107 thousand subsidized policies for around 70 thousand producers last year, the Ministry of Agriculture said in a statement.

The program covered 6.25 million hectares with a total value covered close to R$40 billion, according to data from the ministry. “Thus, for each real invested in the subsidy, around R$42 reais were protected,” said the ministry in the note.

In the year’s rural insurance balance sheet, the Ministry recalled that the PSR budget initially estimated at R$1.06 billion was cut to R$933 million. “The year 2023 presented significant challenges for the Rural Insurance Program (PSR) in Brazil. The Ministry of Agriculture and Livestock (Mapa) managed to fully apply the available resources”, acknowledged the ministry.

The rural insurance budget last year was the lowest since 2022, when it reached R$881 million, according to public data from the federal government’s budget. Last year, the Ministry of Agriculture had at least three requests for supplements to the PSR budget denied by the Budget Execution Board (JEO). The last request for an extra R$500 million was denied at the last board meeting on December 19.

“The challenging scenario was worsened by the rejection of requests for supplementary budgets, leading to cancellations of operations or further burdening producers who bear the full value of the contracts. Even with a smaller budget, the PSR was able to offer protection to thousands of producers, highlighting the continued importance of the program for the sustainable development of Brazilian agribusiness and for the food and economic security of several municipalities, especially in light of the effects of the El Niño climate phenomenon.” , said the Ministry in the note.

According to the ministry, until October, insurance companies paid R$2 billion in compensation to producers for production losses. “Slightly more than double the PSR budget in the same period”, concluded the Ministry.

“We await additional resources to meet the demand for the summer grain harvest. Without this supplementation, farmers will not be able to guarantee losses resulting from climate events that El Niño is expected to intensify. Because rural insurance is an inducer of best practices in sustainability and governance, it is a strong ally of agribusiness and should be included in the Safra Plan”, explained the president of the FenSeg rural insurance committee, Joaquim Cesar Neto.

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