Emerging Insight: Public-private dialogues for sustainable agriculture insurance
9 April 2021
Since 2009, the Peruvian Ministry for the Development of Agriculture and Irrigation (MIDAGRI) has offered a catastrophic agriculture insurance product known as the SAC (Seguro Agrícola Catastrófico). The ministry developed the SAC to enhance the competitiveness of the Peruvian agricultural sector and to reduce the vulnerability of subsistence farmers to natural disasters.
Since launching the SAC, MIDAGRI wanted to improve the scheme in order to increase its coverage in rural areas and protect a greater number of smallholder farmers. This included a number of substantial changes, such as increased funds allocated to the premium subsidy (up from US$9.7 million in 2019-2020 to US$15.8 million in 2020-2021), changes in the contracting process, a focus on financial education, and the introduction of a new integrated information system and claims process.
For such substantial changes, it was important all stakeholders were engaged in a dialogue and the changes followed a collaborative approach. MIDAGRI worked with the German international cooperation agency (GIZ) to improve the institutional framework for agriculture insurance. Regular “public-private dialogues” were held with ministry representatives, the insurance supervisor, the insurance association and financial entities. This helped to develop a joint agenda among all actors to ensure the sustainability of the agriculture insurance programme.
The SAC has had a great impact on smallholder farmers in Peru. In the 2020-2021 agricultural season, more than 950,000 framers benefited from the scheme. Since 2009, approximately US$47 million has been paid in claims.
Find more details about MIDAGRI’s catastrophic agriculture insurance product in our Case Brief.
Since launching the SAC, MIDAGRI wanted to improve the scheme in order to increase its coverage in rural areas and protect a greater number of smallholder farmers. This included a number of substantial changes, such as increased funds allocated to the premium subsidy (up from US$9.7 million in 2019-2020 to US$15.8 million in 2020-2021), changes in the contracting process, a focus on financial education, and the introduction of a new integrated information system and claims process.
For such substantial changes, it was important all stakeholders were engaged in a dialogue and the changes followed a collaborative approach. MIDAGRI worked with the German international cooperation agency (GIZ) to improve the institutional framework for agriculture insurance. Regular “public-private dialogues” were held with ministry representatives, the insurance supervisor, the insurance association and financial entities. This helped to develop a joint agenda among all actors to ensure the sustainability of the agriculture insurance programme.
The SAC has had a great impact on smallholder farmers in Peru. In the 2020-2021 agricultural season, more than 950,000 framers benefited from the scheme. Since 2009, approximately US$47 million has been paid in claims.
Find more details about MIDAGRI’s catastrophic agriculture insurance product in our Case Brief.