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The Need for Agriculture Insurance in South Africa

by | Sep 4, 2014 | Blog, Insurance | 0 comments

The Need for Agriculture Insurance in South Africa

With the challenges that agricultural sector faces, there is a need for insurance to help offset the associated cost with loss. Doing so allows farms to stay in business during rough years and helps to reduce the impact certain events have on the price of goods in the country.

In years where a catastrophic event takes place, such as flooding or an unexpected freeze, the finical impact is transferred so that losses are absorbed, rather than subsidized by increasing the price of crops that can impact consumers.

Agricultural insurance also helps to combat some of the problems that are being faced in the industry. Right now, ageing producers are no longer being replaced as quickly by younger farms and the loss of an experienced grower can have a country wide impact.

With agricultural insurance, farms are able to survive economically and to produce enough crops to remain competitive in today’s market and thrive. When the risk of loss is kept to a minimum, most farmers will invest more in crops, producing more food for the people of South Africa.

In an effort to reduce the cost to reduce the impact of claims, salvage insurance may be required. This is when the farm is required to salvage what they can to alternative sources and then calculate their losses based on that. For example, if apples are grown to be sold whole, but an event takes place and they can still be used as applesauce or another apple product when sold to a processing company, the crop may be salvaged in that respect and then the difference may be paid to the farm.

For this type of insurance, the most commonly protected risks that are covered under agricultural insurance for crops are:

  • Disease
  • Drought
  • Fire
  • Flooding
  • Frost
  • Hail
  • Pests
  • Snow
  • Sunscald
  • Wind

When working with an agriculture insurance provider in South Africa, it is important to review the amount of coverage that is being provided, in addition to any restrictions on the policy. There may be variances in the policy being presented and it is important to select a policy that will provide you with the best protection possible.

Of course, this insurance form isn’t anything new in South Africa. Since the 1970s, there has been this form of insurance available. If you are in the market for agricultural insurance take a moment to review the available plans and begin to work with an agent to secure a policy that will meet your needs.

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Renette Zeelie

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Fax: 086 617 8136


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