Jun 15, 2017
Crop Insurance Coverage to increase in Brazil, still Inadequate
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The amount of crop insurance available to Brazilian farmers has always been very small compared to other major crop producing countries. Crop insurance has been a weak part of an otherwise robust agricultural sector in Brazil. The Brazilian government recognized that the crop insurance program in Brazil needed to be expanded and they took a step in that direction in the recently released 2017/18 Harvest Plan.
In the 2017/18 Harvest Plan, the Brazilian government has allocated R$ 500 million to help provide subsidized crop insurance for Brazilian farmers, which is a 37% increase compared to the 2016/17 plan.
During the 2016/17 growing season, approximately 10% of the soybean acreage in Brazil was covered by crop insurance and less than 20% of all the crop acreage in Brazil was covered by crop insurance. With the increase in funding, insurers in Brazil feel the amount of acreage covered by insurance could increase up to 60% to 9 million hectares. The Brazilian crop with the highest crop insurance coverage is irrigated rice production in the state of Rio Grande do Sul.
Up until recently, crop insurance only represented 2% of the entire insurance market in Brazil, which means there is a lot of room for growth in the future.