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What is Agricultural Insurance, Benefits, and Mechanisms that You Must Know

All about Agricultural Insurance: What is the meaning of agricultural insurance? Why is agricultural insurance important? What are the types of agriculture? and also the Mechanisms, learn more here.

Working with things related to nature has become the culture and initial characteristics of society. Jobs related to nature are farmers. Farmers who own a plot of land will face the threat of risk of great loss if nature does not support it.

Many events such as the rainy season, floods, landslides, and even the arrival of unexpected pests cause agriculture to fail completely. Modern farmers must understand and be able to anticipate the threat of agricultural risksRisk Risk is a loss that occurs to the insured individual or object. Various bad possibilities could happen to someone. in the current era.

If the unexpected (force major) disturbance occurs, farmers often take shortcuts by visiting middlemen to borrow money to rebuild failed farms. After the agricultural products come out, the middlemen will buy agricultural products at very low prices in exchange for paying farmers who have borrowed money.

Insurance Benefits for Farmers

What is Agricultural Insurance, Benefits, and Mechanisms
What is Agricultural Insurance, Benefits, and Mechanisms: Insurance Benefits for Farmers

To overcome this, the government makes protection for farmers so they can grow crops without having to borrow from middlemen again, which actually harms the farmers. The regulation made is the Regulation of the Minister of Agriculture which is the basis for implementing Agricultural Insurance. Agricultural Insurance itself has several facilities that can be utilized. These facilities are:

Insurance Benefits for Farmers No.1 – What is Agricultural Insurance, Benefits, and Mechanisms

It’s easy to register as an insurance member

Farmers can register very easily to get this agricultural insurance. Farmers can start through various data collections that will be carried out by the District or City Office. After the data has been stored in the Regency Government database, it will be forwarded to the Provincial Government which will be sent to the Ministry of Agriculture through the Directorate General.

After the various processes above have been completed and approved, the farmer can fill out the registration form as a prospective insurance user. Don’t worry if you are afraid that you will experience difficulties in filling in because the farmers will be accompanied by officers from the Regency/City Service. The data that is already available will be verified by various levels of government, starting from the district, province, to the central government.

Insurance Benefits for Farmers No.2 – What is Agricultural Insurance, Benefits, and Mechanisms

Easy Access to Insurance Companies

If the data is available and has been verified by the government, the farmer can start by holding a meeting with the insurance company. Starting from this meeting, farmers have started to have an attachment to insurance companies.

No need to worry, as a farmer all data will be safe and protected by insurance companies and the government. All data that you own will be safe and protected. Data collection is also financed by the state budget, which begins in stages from the recommendation of the regent and will later be submitted to the minister by the governor.

Insurance Benefits for Farmers No.3 – What is Agricultural Insurance, Benefits, and Mechanisms

Socialization regarding the Agricultural Insurance Program

This socialization has several stages that will be passed, such as through an application to become a prospective member of agricultural insurance and then proceed with the determination and selection of various insurance risks and premiumPremium The money that must be paid at a certain time is the obligation of the insurance policyholder. The amount of premium paid is determined by the policy and approval of the insurance company in accordance with the conditions of the insured. The nominal payment approved by policyholders and insurance companies. Premium payment will be made according to the agreement, it can be monthly, yearly, or according to the agreement. payments. The insurance policyInsurance policy An agreement between the policyholder and the insurance company to perform the obligations as agreed by both parties. will be issued after registration and the premium payment is received by the insurance company from the farmer. All stages are completed and the farmer can submit a claimClaim The demands are given by the insurance policyholder to get the right properly so that the insurer pays the conditions according to the existing procedure. after the farmer reports the damage and loss and obtains approval from the insurance company.

Insurance Benefits for Farmers No.4 – What is Agricultural Insurance, Benefits, and Mechanisms

Premium Payment Assistance

Just like health insurance or life insurance, in agricultural insurance premium payments can also be made individually or in groups. This premium payment will involve the Directorate General, Provincial Office, and Regency / City Service. Now as a farmer you can rest easy because the regulations that have been passed by the government will make it easier for farmers if they experience a loss due to natural events.

While this insurance pay scheme is divided into 2 types, namely:

Agricultural Insurance Payments Scheme Type No.1 – What is Agricultural Insurance, Benefits, and Mechanisms

Self-help Premium Scheme

With the Self-help Premium Scheme, the mechanism is categorized into 3 types, which is:


If the farmer chooses to pay insurance through this type, the farmer must pay the full contribution and not be assisted by other parties. Because this type is done independently of course all payments are also made privately.


In contrast to the type above, in this type, the farmer does not pay in full alone. However, in this type, the farmers will be assisted by a partnership company. If you choose this type, the payment will be made in accordance with the agreement that has been determined and agreed upon by both parties.

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This type will be adjusted to the amount of credit made by farmers. So farmers will only pay according to the amount of credit only.

Agricultural Insurance Payments Scheme Type No.2 – What is Agricultural Insurance, Benefits, and Mechanisms

Premium Scheme with Subsidy Funds from the State Budget

Premium payments through this type have higher difficulties than others because, in this type, farmers have to go through various sets of existing rules. In this premium payment, the government has the burden of 80% of payments and 20% is the duty of the farmers to pay.

The system that is owned is quite simple because the registration is done through existing farmer groups making it easier for farmers to register. However, in carrying out the various series above, farmers must meet several conditions that have been provided.

  • If the farmer is a sharecropper, the farmer does not own a private farm. Cultivated land should also not exceed two hectares.
  • If the farmer owns private land, the working area is not more than two hectares
  • Is a horticultural farmer, gardener, or breeder on a small scale.
  • Farmers who wish to join insurance must have joined a farmer group and be active members of the group.
  • This acceptance will prioritize farmers who are included in sustainable food agriculture
  • If farmers receive premium assistance, then farmers must carry out farming or animal husbandry well and seriously.

Types of Agriculture Included in the Farmers Insurance Category

What is Agricultural Insurance, Benefits, and Mechanisms
What is Agricultural Insurance, Benefits, and Mechanisms: Farm Type

In its development, this agricultural insurance has 2 types, namely:

Types of Agriculture Included in the Farmers Insurance No.1 – What is Agricultural Insurance, Benefits, and Mechanisms

Insurance for Plants

Only plants that can be included in crop insurance are food crops, horticulture, and plantations.

Types of Agriculture Included in the Farmers Insurance No.2 – What is Agricultural Insurance, Benefits, and Mechanisms

Insurance for Livestock

Livestock businesses that can enter into livestock insurance are the only livestock that is non-ruminant and monogastric/pseudo-ruminant.

The Conclusion

Agricultural Insurance, The Right Solution to Protect Farmers in Your Country

Through this agricultural insurance, farmers do not need to worry about land because the government will return the capital to farmers so they can continue their agriculture. Farmers also no longer need to feel the loss due to the actions of middlemen who take advantage of the difficult conditions of farmers and make it even more difficult.

Through various processes and existing rules, every data you have will be protected and accounted for. Therefore, farmers do not need to hesitate and feel indecisive again to start this agricultural insurance. All the losses that farmers have received when borrowing money from middlemen will no longer be felt if farmers join together in this agricultural insurance.

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