Agricultural Insurance is Important for Farmers to Face Drought, Why?

Farmers must anticipate the dry season every year. The threat of a long drought can cause drought and make farmers experience crop failure. Therefore, farmers are encouraged to take advantage of insurance as a component in farming to mitigate risks in the event of crop failure. “If a farming or livestock business experiences crop failure, farmers will get compensation or a claim from an insurance company,” said Director General (Dirjen) of Agricultural Infrastructure and Facilities (PSP) of the Ministry of Agriculture (Kementan) Sarwa Edhy in a written statement, Tuesday (7/7). /2020). According to him, the existence of insurance makes banks more confident in distributing credit, so there is a guarantee for the continuity of farming and there will be no credit defaults. Also read: Kemenkop UKM Encourages Agricultural SMEs to Go Digital “There are two types of agricultural insurance that can be used, namely Rice Farming Business Insurance (AUTP) and Cattle/Buffalo Business Insurance (AUTS/K),” said Sarwa Why. For AUTP, he added, the premium is IDR 180,000 per hectare (ha) per planting season (MT). The insured value is IDR 6 million per ha per MT. This insurance protects farmers against pests and diseases, floods, and droughts. Meanwhile, the AUTS/K premium is IDR 200,000 per head per year. The sum insured is divided into three. For dead cattle, the insured value is Rp. 10 million per head, forced slaughter of Rp. 5 million per head, and loss of Rp. 7 million per head. Also read: Increase Agricultural Productivity, These are Innovations and Modernizations carried out by the Ministry of Agriculture “In order not to burden farmers, the implementation of agricultural insurance can be synergized with the People’s Business Credit (KUR),” said Sarwa Why. He continued, farmers who get KUR financing must register for agricultural insurance, especially for rice farming, and business insurance for cattle or buffalo. Anticipate potential losses with agricultural insurance A similar statement regarding the benefits of agricultural insurance was also conveyed by the Minister of Agriculture (Mental) Syahrul Yasin Limpo. According to him, farmers must anticipate potential losses due to drought as a result of the long dry season by following agricultural insurance. The Minister of Agriculture’s invitation to participate in agricultural insurance was specifically addressed to farmers in Kebumen Regency, Central Java. Meanwhile, ahead of the 2020 dry season, only 8 percent of all farmers there are taking advantage of agricultural insurance.