Drought Index, the first drought insurance product brings new benefits to Romanian farmers in the agricultural year 2021
February 23, 2021, 7:00:00 AM
Bucharest, 22.02.2021: Agra Asigurări, one of the market leaders in the field of agricultural insurance, and also the first company to in Romania a drought insurance product, aids the farmers with new benefits for agriculture in 2021. Starting this year, Drought Index and Agrar Basis become the same policy with additional advantages, such as providing soybean crops insurance and compensation for a lower precipitation deficit of 30%. Farmers can get financial compensation for the damage caused by drought, hail, and other natural disasters on crops, through a simple and non-bureaucratic risk underwriting process. The damage assessment is transparent, and its calculation bases on historical parameters provided by the 121 meteorological stations accredited by ANMH, also included in the insurance product for drought and heat.
Heat waves, the lack of rainfall in recent years, along with the increasingly frequent weather extremes, confirms that climate change has a severe impact on agriculture. In the agricultural year 2019 - 2020, the extreme pedological drought wreaked havoc on crops in several areas of Romania, affecting about 2.2 million hectares of arable land, which represents almost a quarter of the arable land of the country, as well as a third from the portfolio insured on this risk. The largest deficit of precipitation registered was in the south-eastern part of the country in Moldova and Dobrogea. The most affected crops were spring, corn, and sunflower, but autumn crops were also affected. The need for farmers for insurance in these areas of the country is growing.
“Given the precarious situation of irrigation systems in our country, drought insurance is meant to support Romanian farmers. Since its entrance into the Romanian market, Agra Asigurări has brought several insurance products, including Drought Index, which was an unique insurance product in the market back in 2015", stated Adrian-Horia Lupu, General Director of Agra Asigurări Romania.
New benefits introduced in the Drought Index 2021
Starting with 2021, Agrar Basis and Drought Index become the same insurance policy to support farmers, adapted to the field reality. Drought Index is a supplement to the Agrar Basis policy in the context of sub-measure 17.1 and comes with several new features and benefits to strengthen support for farmers.
The most important advantage is the subsidy granted by the Agency for the Financing of Rural Investments. Since 2019, drought and heat are risks eligible by AFIR through Sub-Measure 17.1. The financial supplement agreed in the Drought Index policy can be granted together with the large crops policy, Agrar Basis. Thus, the farmer has the crop insured both for the risk of drought and for hail or frost, in a single policy. At the end of this policy, the farmer can choose the insured amount per hectare for each crop and the reference weather station for the precipitation level.
Agra Asigurări has a partnership with 121 weather stations accredited by ANMH, the National Meteorological Administration. As an index product, the assessment of drought damage is done transparently, based on the analysis of official historical parameters for the last 7-10 years, provided by eligible weather stations, chosen by the farmer at the end of the policy.
Soybean crops can benefit from the insurance policy, along with fall wheat, corn crops, and sunflower starting this year.
Agra Asigurări makes available to farmers a new option available at the end of the policy, the 60/30 compensation option. In this sense, drought compensation starts from a lower deficit of precipitations, an advantage for farmers. Remuneration is also granted on each percentage point of the rainfall deficit and the entire insured area mentioned in the policy.
Farmers now also benefit from an extended deadline until 30.04.2021 for subscribing to policies for sunflower, corn, and soybean crops. For autumn wheat cultivation, the deadline for submitting the insurance application is 26.02.2021.
Retrospective and challenges of the 2019-2020 sales season
The events triggered by the drought and the global crisis generated by the pandemic of the Covid-19 virus amplified the negative impact on the farmers. This required an assessment of the damage by the safety measures imposed by the authorities.
The future of crops sown in the spring of last year, which were affected by the drought, is still in question. There is no official decision on this compensation from MADR yet.
“The Agra Asigurări team wants to respond promptly to the requests for insurance and crop evaluation, guaranteeing safety and continuity in this sector. The context of social distancing and the transition to online activity has been a challenge for both the insurance market and the agricultural industry. However, we are looking at a successful sales season and we are glad that we managed to be with the farmers even in this difficult period ", stated Adrian-Horia Lupu, General Director of Agra Asigurări Romania.
About Agra Asigurări
The insurance company Österreichische Hagelversicherung was founded in 1947 in Austria at the initiative of farmers by Austrian insurance companies. Due to its exclusive experience in the agricultural field, Agra Asigurări is one of the few European insurance companies that insure drought since 2000. Since the opening of the local branch in Romania in 2016, drought risk insurance is now available for Romanian farmers, along with standard coverings for hail, fire, storm, torrential rain, and frost.