Farm area/size of the organisation:
Number of workers:
Farm main activity:
Agricultural insurance is a risk coverage resource available in the Spanish agricultural sector. The insurance has a public component, with Agroseguro being the managing institution at the national level.
The insurance has several systems of coverage. The yield insurance we are analysing in this case seeks to guarantee up to 75 % of the historical yields associated with a farm. This farm has a risk premium linked to the region to which it belongs, and this risk defines the price to be paid per hectare by the farmer who takes out the insurance.
The purpose is to guarantee incomes when an adverse weather event reduces the yield of a farm.
For harvest reductions below the reference yields of that farm, the farmer may report damages, charging the difference between 75% of the reference yield and the yield finally obtained, with a reference price of 30 cnt/kg (in 2014).
The farmer decided to take out insurance in 2014. Their rainfed plantation had a strong yield that year, which together with a warm and dry winter made them anticipate a low harvest the following year.
They took out the insurance in winter and in spring a heatwave damaged the flowering of the province of Jaén, making it the year with the lowest provincial production in the last decade.
Information on insurance can be consulted directly on the Agroseguro website.
Agrarian insurance is distributed through multiple institutions: insurance brokers, financial institutions, cooperatives, and agricultural associations.
These agents provide information, advice, and insurance processing.
COAG Jaén, like other agricultural insurance intermediaries, offers information, training, advice and processing of Agroseguro policies.
The offered services include the preparation of yield calculations, the preparation of budgets and the identification of the module that best suits the farm.
The current cost is around €50/ha. It is the result of applying a 75% subsidy from public funds, which is also included in the tax return.
This cost can be reduced in successive contracts through bonuses and discounts, the aim of which is to ensure the loyalty of farmers who enter the insurance system.
Registration in the CIAS database of the Ministry of Agriculture is needed, so that a starting yield is assigned, which is the reference for all calculations.
The insurance is taken out by adjusting the contract parameters: duration, % coverage, plot or farm scale, etc.
In case of an expected low production, the farmer has to inform Agroseguro, which assesses the impact and applies the compensation.
The system is complex due to the number of modules, coverages and the insurance operation.
It is essential to make knowledge accessible and to adapt the best options to each farm. Case studies, simulations and positive experiences are useful for this purpose.
Ideally, farmers should be able to define their own scenarios, based on a whole understanding of the system.
With 0 yield, the insurance guarantees up to 75% with an excess of 10% and a reference price of 30cnt/€ (in 2014). In the case of Dolores, their reference yield for 350 trees was 56kg/tree. Considering 0kg of production, the result was:
350 trees x 56kg/tree (reference yield) x (75% coverage – 10% excess) x 0,3€/kg = €3.969 €.
It is a balanced system for the current climatic situation in Spain, but the evolution of climate change and its impacts in the medium and long term raises questions.
In a dynamic of recurrent droughts, an entry of many farmers into the system with massive claims would attack its sustainability.
With 0 yield, the insurance guarantees up to 75% with an excess of 10% and a reference price of 30cnt/€ (in 2014). In the case of Dolores, their reference yield for 350 trees was 56kg/tree. Considering 0kg of production, the result was:
350 trees x 56kg/tree (reference yield) x (75% coverage – 10% excess) x 0,3€/kg = €3.969 €.
It is a balanced system for the current climatic situation in Spain, but the evolution of climate change and its impacts in the medium and long term raises questions.
In a dynamic of recurrent droughts, an entry of many farmers into the system with massive claims would attack its sustainability.
The system is managed by public entities that depend on the Ministry of Agriculture. There is strong government support for this model of agricultural insurance. It would be necessary to set up these public agencies and generate the necessary budget to build the system. The aim is not to reward profit but to create a system in which some crops and regions compensate others, with a net result of the system that does not generate a deficit.
“Obtaining information and advice from the system is needed to integrate it as a management tool”.
“You need to be guided by your own experiences rather than by others”.
AGRIWATER project has been funded with the support from the European Commission, with the reference number 2020-1-CZ01-KA204-078212. The content of this website reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
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