cropinsurance technology inductor · technology inductor laura neves. index 1. crop insurance in...
TRANSCRIPT
Index
1. Crop Insurance in the World and Brazil
2. Brazilian Grower and Risk Management
3. Private Crop Insurance
Crop Insurance
3. Private Crop Insurance
Conclusion
The Beginning of Crop Insurance
• USA- 1920B
• Japan - 1939
• India - 1947
• Sri Lanka - 1958
• Canada - 1959
Crop Insurance
• Canada - 1959
• Sweden - 1961
• Mexico - 1964
• Brazil - 1954 -1970 (Credit)
– 1998 (Production)
• Final Century XIX: Sao Paulo – Cotton & Rio Grande do Sul – Rice.
• 1954: Nacional Crop Insurance Company and Federal Fund for Crop Insurance
• 1966: Stabilization Fund for Crop Insurance – With Mandatory Credit
• 1973: Guarantee Program for agriculture and livestock -PROAGRO – IS NOT Crop Insurance –
Crop Insurance is one of the most important instruments of sustainability, protection and
maintenance of governmental agricultural politics.
History of Crop Insurance in Brazil
Crop Insurance
• 1973: Guarantee Program for agriculture and livestock -PROAGRO – IS NOT Crop Insurance –
Federal Government pays the losses
• 1988: CF Art. 187
• 1991: Law 8171 – Agriculture Law/New Proagro/ Defrayal
• 2003: Law 10.823
• 2004: Resolution3.234/04
• 2007: Complementary Law 126/2006
• 2010: PLC 374/08
Legal Frame
Crop Insurance
BrazilianBrazilian ConstitutionConstitution (1988) (1988)
Title VII, Chapter III of Agricultural Policy and Land and Agrarian Reform Title VII, Chapter III of Agricultural Policy and Land and Agrarian Reform -- Art. 187 Art. 187
Inc. V Inc. V –– The Crop InsuranceThe Crop Insurance
Economic Stability to the
Grower
Development
Inductor
Farming
Technology
Maintenance of
employment in
the field
Production
protection
Offer Credit
Protection
Equalization of
the
government
budget
LawsLaws
InternacionalInternacional
negotiationsnegotiations
Support Support
ProgramsPrograms
AccessAccess & Cost of & Cost of
CapitalCapital
PatrimonyPatrimony
LiquidityLiquidity
Market Market
AccessAccess
Adm.Adm.
AgrícolaAgrícola
Credit
Insurance,
Life
Insurance
RiskRisk
Management Management
in in AgricultureAgriculture
Crop Insurance
ProductionProduction
Natural Natural
LossesLosses
AccessAccess
AvailabilityAvailability
products andproducts and
inputsinputs
Availability andAvailability and
CompetenciesCompetencies
AgrícolaAgrícola
Production
and Damage
Insurance
Income
Insurance
Garantee
Contracts
Sources of CreditCrop Insurance
Bonds
Fonte: Banco do Brasil (2010)
Source: Bank of Brasil
Crop Insurance
Loss of production
Non compliance and
impairment of assets
Inaccessibility to credit
Socially unfair
Instead of solving Instead of solving
the problem the problem
increases and increases and
adjornsadjorns::
Agriculture without Insurance
March 2011
Inability to pay debts and
produce
High political Cost
Low economic efficiency
Socially unfair adjornsadjorns::
WEAKWEAK MARKETMARKET
3
Agriculture with Insurance Crop Insurance
Loss of production
Receipt of indemnity
New yearNew year
New Crop Season: New Crop Season:
MARKET STRONG, MARKET STRONG,
STABLE AND SELFSTABLE AND SELF--Economic growth and
Financial autonomy
Maintenance of access
to credit at fair rates
Expansion of investments
Maintenance and
guarantee of the
government budget
STABLE AND SELFSTABLE AND SELF--
SUFFICIENTSUFFICIENTEconomic growth and
development
• Insurance Industry – Brake paradigms• Statistics - Trustworthy• Infrastructure• Administrative Cost
Barriers to Implementation
Crop Insurance
• Administrative Cost• Brazilian insurance culture• Government Paternalism (historical)
Crop Insurance
NationalCouncil Of
PrivateInsurance
(CNSP) Superintendenceof Private
Insurance(SUSEP)
Ministry ofAgriculture
Insurer
Reinsurer
Barriers to Implementation
Agents of Risk
Crop Insurance
Insurance AgricultureCommittee
(MAPA)
AgronomistEngineer
Managing Agent
Insurance
Broker
Government Government (Subsidy)(Subsidy)
Foreign Investors and New ProductsCrop Insurance
Rural GrowerRural GrowerInsurerInsurer ReinsurerReinsurer
New ProductsNew Products
Without Insurance
Investment
ExpectedExpected GuaranteeGuarantee YieldYield : : R$ 60.000R$ 60.000
00 42.00042.000
Loss Indemnity Balance
00Impact on Investment =
Increased access to
insurance
Loss Finance
R.O.E.
Crop Insurance
Data: Grape insurance to hail (30% damage), 4ha, 60%. Subsidy
With Insurance
With Subsidy
With Insurance
No Subsidy
(1.176)(1.176)
(2.940)(2.940) (18.000)(18.000)
+18.000+18.000
58.82458.824
57.06057.060
insurance
Agricultural Sector ���� Federal Premium SubsidyCrop Insurance
Groups of CulturesSubsidy
PercentageLimits in R$
Beans, Corn, Corn 2nd. Crop and Wheat. 70%
96.000,00
Apple, Barley, Canola, Fig, Flax, Grape, Kiwi, Nectarine, Oat, Peach, Pear, Persimon, Plum, Rye, Sorghum andTriticale..
60%
Corn, Cotton, Rice and Soybean. 50%
Atemoya, Avocado, Banana, Cabbage, Cajun, Carrot, 96.000,00Atemoya, Avocado, Banana, Cabbage, Cajun, Carrot, Cauliflower, Castor Beans, Chayote, Cherimoya, Chicory, Citrus Family, Cocoa, Coffee, Cone, Cucumber, Eggplant, Fava, Garlic, Guava, Lemon, Lettuce, Lime, Lychee, Mango, Manioc, Melon, Obergin, Okra, Onion, Orange, Papaya, Passion Fruit, Peanut, Peas, Pepper, Pineapple, Potato, Pumpkin, Sisal, Soursop, Strawberry, Sugarbeat, Sugar Cane, Sunflower, Tangerine, Tomato, Pod, Watermelon, Zucchini and other vegetables.
40%
Source: MAPA
Crop Insurance ���� Subsidy and Growth
30.000
40.000
50.000
60.000
400
500
600
700
800
Crop Insurance
2005 2006 2007 2008 2009 2010 2011* 2012
Plano trienal 10 61 100 176 176 451 570 680
Subsidio realizado 2 31 61 157 259 198 253
Produtores subsidiados 849 16.653 27.846 43.642 56.306 38.209 51.728
-
10.000
20.000
-
100
200
300
?Source: MAPA
WhenWhen naturenature is is notnot onon youryour sideside, , wewe are!are!
ThankThank youyou!!
Laura NevesLaura Neves