The Chilean Ministry of Agriculture is to funnel US$6m into government-sponsored agriculture insurance against weather phenomena, following a series of weather-related incidents which have affected Chile’s agriculture sector, and particularly the fresh produce industry, in the last year.
Minister Marigen Hornkohl announced in a press release that the Agriculture Ministry will revamp the policy to allow growers of all sizes to access wider coverage and premiums for their crops.
From this year onwards, the agriculture insurance will also include protection for crops such as avocados, blueberries, apples and pears. And, over the next few years, the Ministry expects to include coverage for all types of fruits, including citrus, stonefruit, and other berry types.
The Ministry has also pledged US$1m to co-finance the cost of insurance premiums for fruit growers.
Last year saw the most activity in this type of insurance since its creation in 2000, according to Ms Hornkohl, who’s Ministry expects to place some 14,000-15,000 policies in 2008.
Chile’s agriculture insurance against climatic phenomena is a government-backed initiative which allows growers to transfer their climate risk to P&C companies in order to stabilise financial flows and ensure continuous activity.
The government subsidises 50 per cent of net premiums, plus US$61.2 per premium with a US$3,266 maximum subsidy per farmer.