The agricultural insurance o “agri-insurance”.” are a risk management tool for farmers and stockbreeders in the face of adverse climatic and other catastrophic natural events.
On this occasion we look at the different types of agricultural insurance for cover ranging from frost, floods and drought to disease and the removal of animal carcasses following an accident.
But, what is farm insurance in Spain and what does it mean?
The current agricultural insurance system is based on the joint intervention of public and private institutions, with the participation of 22 insurance companies.
The Spanish Agricultural Insurance System, with state subsidies to the producer for the payment of premiums, is considered one of the best in the world.
From PIB Group Iberia We always insist on the importance of having a agricultural insurance. The reasons are the same as those for which this system has long been established: inclement weather and disasters can cause terrible losses that are very difficult to bear.
The Spanish Agrarian Insurance System was forged in 1978 with the Law 87/1978 on Combined Agricultural Insurance. And after more than 30 years of existence, this system is consolidated. It has different types of insurance differentiated by sector: agriculture, livestock, aquaculture and forestry.
1. Agricultural insurance
These farm insurances range from olive farms, to open-air vegetables, to all types of fruit and vegetables grown in the country. There are mainly two types of insurance:
1.1 Combined Insurance
Combined insurance is also known as multi-risk insurance. They offer specific guarantees against specific risks that may affect the insured production.
Compensation is determined at plot level and premiums are fixed for each risk and crop area by species or variety:
- citrus fruits,
- wine grapes,
- vegetables under cover...
In other words, they insure the damage that may occur on an agricultural holding depending on its location and according to species or variety.
1.2 Income Insurance
Yield insurance covers the costs of the climatic adversities (floods, hail, etc.) and others natural hazards that may affect a crop.
The aim is to guarantee the farmer a percentage of insurable yields in its operation. These yields are fixed by the Ministry.
To set premiums, insurers rely on the location, species and historical performance data of the insured.
2. Livestock Insurance
Livestock farms have specific insurance and services for the sector. Coverage is provided for all types of cattle, sheep, goats, horses, poultry for meat and laying hens, pigs and bee-keeping. Three types of insurance stand out:
2.1 Accident and sickness insurance
These insurances aim to alleviate this type of mishap with compensation generally per animal.
They face basic accident cover such as injuries, drowning or falling of animals. However, depending on the class of livestock, animals may be insured for other risks such as illnesses and problems related to childbirth.
2.2 Drought insurance
What are livestock drought insurances used for? These insurances are generally used for the grazing livestock, The costs of feeding are increased due to the lack of vegetation.
They are also common in the beekeeping.
2.3 Removal of dead animals from the holding
The removal of a dead animal can be very costly and uncertain for the farmer.
With this type of insurance, it becomes a fixed cost that allows all costs of removal and destruction of dead animals on a farm to be covered. This withdrawal covers both the death from natural causes as for accident.
3. Aquaculture Insurance
It covers various types of damage that can be suffered by the aquaculture species and ranging from weather events to lower salinity due to rainfall, temperature variation or even disease.
4. Insurance for Forest Risks
Forestry operations involve risks such as fires, flooding due to torrential rain, hurricane-force winds or even snow.. This insurance covers part of this damage.
Fundamentally, we are not just talking about the loss of timber resulting from the fire, but also the costs incurred to regenerate and restock.
Many of these insurances have associated subsidies that can reduce the real cost of the policies. Do not hesitate and contact us. From PIB Group Iberia we will help you minimise your losses.
