The agricultural insurance offered to producers through the Dominican Agricultural Insurance Company (Agrodosa) could disappear in the medium term due to the lack of economic support from the Government.
The warning was made yesterday by the insurance expert, Ramon Tamburini, who pointed out that Agrodosa’s reserves are accounts receivable from the Government, which amount to RD$890 million as of December 31 of last year.
He added that the General Directorate of Agricultural Risks (Digera)in its institutional reports published on the Web, at the end of 2023 presents a financial report confirming that it owes Agrodosa close to RD$806 million for unpaid subsidies. The agricultural insurance premium that the insurer grants to producers is subsidized by 50% and the producer pays the other 50%.
This agricultural insurance company, with mixed capital (public-private), has lost its capacity to respond because it has operated with an enormous deficit in premiums, which has caused its decapitalization because the Government does not pay full premiums corresponding to the subsidy from producers, Tamburini said.
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Most affected
By reasonably weighing the impact that the closure of the insurance would have on the sector, we visualize that it will bring, among other consequences, the abandonment of thousands of small farmers who work the land in the most vulnerable areas, which will have a high social and political cost. for the Government. Thousands of small producers currently benefit from having an insurance policy, not only with the compensation they would receive in the event of damage, but also allowing them to access bank credit, since the guarantee of the loan is agricultural insurance.
The insurance expert explained that the vast majority of those affected will be rice producers, and since next January the DR-CAFTA agreement on the elimination of tariffs on rice will come into force, the closure of the insurance will imply another mortal blow to this important sector. He considered that the president Luis Abinader is compelled to intervene and prevent agricultural insurance from failing in its management and must capitalize Agrodosa, since the risks assumed by it exceed RD$14,000 million annually, which – he specified – in the event of a catastrophic event, will guarantee the continuity and recovery of the agricultural sector.
Necessary tool
Agricultural insurance is an indispensable tool to protect the agricultural sector, transfer risks and guarantee food security, Tamburini stated. He highlighted that regardless of the insurance model adopted, it is necessary to increase state investment in contributions to producers, invest in the promotion, accessibility and strengthening of this type of insurance because it not only helps farmers face the immediate losses caused by the disasters, but also contributes to the sustainable and resilient development of the agricultural sector in the long term. In addition, he pointed out, it is necessary to continue improving climate information infrastructure and risk monitoring systems to offer more personalized and efficient insurance products.
Climate change
Faced with the reality of climate change that has increased the intensity and frequency of meteorological phenomena, increasing the exposure of the agricultural sector to devastating events, agricultural insurance becomes a crucial mechanism to protect farmers and guarantee the continuity of the food production.
