So far, once we hear the word insurance, the thing that involves our mind is life assurance , insurance , or work accident insurance. However, did you recognize that business assets also can be insured? There are several sorts of businesses which will be insured, including agricultural business asset insurance, cattle / buffalo livestock business assets, and fisheries asset insurance. On this occasion, let’s get to understand more about insurance in agriculture.
This type of insurance in agriculture aims to stop losses on the a part of the farmer within the event of undesirable things during the cultivation process. Agriculture is taken into account to be one sort of business that’s filled with risks, you know. does one know that agricultural business can lose money at any time? for instance , thanks to drought, pests, landslides and prolonged rain, it’ll certainly disrupt farmer productivity.
As we know, Indonesia is an agricultural country where around 28.79% of Indonesia’s population works within the agricultural sector as their main occupation. Indonesia is additionally a rustic that’s rich in natural resources because it’s a tropical country, but due to its tropical climate, this will also cause failure within the agricultural sector. Floods during the season , drought within the season , aside from being caused by changing seasons, the potential for failure also can be caused by pests, plant-disturbing orgasms, and disease. When their business fails, it isn’t only the farmers who lose money, the community also can be affected. the massive number of crop failures of agricultural land triggers price increases to the scarcity of products . that’s why the govt must step in to scale back the danger of this failure . Agriculture may be a sector that deserves more attention, this is often then the idea for the issuance of Agricultural Insurance for farmers to guard their businesses. Participation within the Agricultural Insurance program provides an alternate funding scheme which will protect participants in order that they will re-finance their agricultural business within the following season within the event of a failure .
At now , my friend must already skills important Agricultural Insurance is for farmers. However, what’s the meaning of agricultural insurance itself? Agricultural insurance may be a sort of protection for farmers, through an agreement between the farmer and therefore the insurance firm to commit himself to the danger coverage of farming, especially rice farming. Farmers, especially rice farming can transfer the danger burden they bear to 3rd parties by insuring their business, which is understood as Paddy Farming Business Insurance (AUTP) in order that farmers can specialise in better, safer and more profitable farming management.
Until now, the sole general insurance firm appointed to supply agricultural insurance by the Ministry of Agriculture (Kementan) is PT Asuransi Jasa Indonesia ( Jasindo). This AUTP program is implemented by the Ministry of Agriculture supported Law (UU) Number 19 of 2013 concerning Protection and Empowerment of Farmers. In Article 37, there’s a mandate to the govt and native governments to guard farmers’ businesses within the sort of agricultural insurance.
Rice Farm Business Insurance Products (AUTP)
Jasindo has several insurance products that have the support of the govt , in terms of agricultural products provided are Rice Farming Business Insurance (AUTP) which provides protection to farmers from the danger of failure as a results of the danger of flooding, drought, disease and attack by plant pests.
Following are the small print of the AUTP product:
a. Premium: IDR 180,000 with government assistance 80% of premium to IDR 36,000 per hectare / per planting season
b Coverage: the utmost sum insured is IDR 6,000,000 per hectare (ha).
c. Criteria for farmers: Cultivators or farmers who own a maximum of two hectares per registration.
d. Land criteria: Irrigated land or rainfed land on the brink of water sources also as technical, semi-technical and straightforward irrigation.
e. Compensation :
· The age of rice has passed 10 days after planting (DAT)
· Rice age has passed 30 days (tabela / gogo rancah)
· Intensity of injury =75% (greater than or adequate to 75%)
· Extent of injury = 75% on each natural plot (more than or adequate to 75%)
Under AUTP, rice farmers only got to pay a premium of IDR 36,000 per ha / planting season, with a government subsidy of IDR 144,000 per ha / planting season. If you experience a disaster, be it a flood or drought and are exposed to pests, you’ll get a compensation of Rp. 6 million per hectare.
However, it should be noted that there are exceptions to policies where agricultural insurance doesn’t cover physical damage and / or loss to the insured rice plants that are directly or indirectly caused by or as a result of:
Fire; Theft and / or loss during and after the incident which is roofed by the policy; The Insured Deliberately, the Insured’s representative or other party at the order of the Insured; The intention of the opposite party with the knowledge of the Insured, unless it are often proven that it happened beyond the control of the Insured; Deliberate mistake or negligence by the Insured or a representative of the Insured; Forest, bush, alang-alang or peat fires; Explosions by means of explosive types; Nuclear reactions include but aren’t limited to nuclear radiation, ionization, fusion, fission or radio-active pollution, no matter whether it occurs inside or outside the insured rice cultivation area; Earthquakes, volcanic eruptions and tsunamis; All sorts of business interruption and similar financial losses.
Since it had been first launched, agricultural insurance is getting a positive trend. Taking under consideration the primary year of publication, Secretary of the Directorate General of Agricultural Infrastructure and Facilities (PSP) of the Ministry of Agriculture, Mulyadi Hendiawan said, the belief of AUTP within the last four years (2015-2018) showed a positive trend with the entire insured paddy fields reaching 2.5 million ha from the target of three .5. million ha or 72.50%. Until July 2019, there have been 375,278.28 hectares of AUTP that had been protected by the AUTP program from the 2019 target of 1 million hectares. And until July 2019 Jasindo has paid AUTP claims of Rp. 10.9 billion with a complete claimed acreage of 1,824.49 ha.
SIAP as an answer
Jasindo has launched the Agricultural Insurance data system (SIAP) application. The SIAP application is that the results of collaboration between the Ministry of Agriculture (Kementan) and Jasindo to simplify insurance registration and data collection.
Previously, because the main condition, farmers had to hitch one among the official groups. This group generally can only be declared officially formed if it’s received a choice letter from the Ministry of Agriculture. the rationale is, through a decree that the performance of a gaggle are going to be assessed and evaluated. This assessment is predicated on the Minister of Agriculture Decree No. 41 / Kpts / OT.210 / 1992.
After joining a gaggle and understanding the advantages of guaranteed losses from the program, farmers can register themselves immediately. However, registration time usually takes place no later than 30 days before the planting or livestock season begins. To register themselves, farmers also will receive special assistance from the District Office Technical Implementation Unit ( UPTD) officers and therefore the Field Agricultural Extension (PPL).
SIAP is present as a response to complaints from the Agricultural Service throughout Indonesia and a number of other other parties regarding the presentation of knowledge or registration of farmer insurance. The existence of this SIAP application can certainly improve data presentation, facilitate farmer registration, and even overcome the matter of lack of personnel from Jasindo which had become a complaint in various regions. Now SIAP is here to enhance services by simplifying the system, supporting agriculture 4.0, and monitoring the implementation of AUTP in real time . AUTP registration and claims also can be more practical and easier.
Very useful right, friend? the govt is trying hard to guard the companies of Indonesian farmers, one among which is by providing subsidies to ease the burden on our farmers to pay insurance premiums in order that their businesses are protected.
The conditions of losses experienced by farmers are sometimes employed by irresponsible individuals to hunt personal gain. Usually farmers will go straight to the middlemen to borrow capital to rebuild their failed businesses, and when the harvest season arrives, the produce is sold very cheaply to the middlemen as payment. in fact we all want to interrupt this chain in order that our farmers can sleep in prosperity. But unfortunately, not many insurance companies in Indonesia sell agricultural insurance products. OJK, together with the Ministry of Agriculture, the Ministry of BUMN and BUMN insurance companies, initiated insurance companies, both BUMN and personal , to organize agricultural insurance products for the general public .