A stable system: The advantages of public-private partnership with SystemAgro

The only chance of effectively and sustainably countering current challenges the agricultural sector is facing is by sharing the risk between government, insurers and agriculture. SystemAgro is based precisely on the idea of public-private partnership. Experience clearly shows that this is the only approach yielding a sustainable and workable solution.

A public-private partnership not only spreads the risk on several shoulders, it also brings other major benefits for all concerned:

• Farmers secure their financial stability through multi-peril crop insurance that is accessible and affordable to all.
• The government stabilises its agricultural sector by means of a clearly defined and thus plannable level of expenditure into a comprehensive crop insurance system.
• Specialist insurers provide insurance cover tailored to the needs of each individual farmer and offer the prospect of sustainable business.

This frees up money for investments. Both upstream and downstream industries in the value chain benefit from SystemAgro.

The advantages of public-private partnership

Farmers

Farmers receive the financial stability they need to make the necessary investments in their farms. SystemAgro enables all farmers to obtain insurance cover – regardless of the exposure they face or the type of agricultural production involved. Insurance offers a high level of security at affordable and transparent premium costs.

Farmers receive a tailor-made instrument to cover their risk situation. This protection gives the farmers the security they need to give to lending banks. The stable income even in the event of crop losses improves their financial and credit standing with the banks.

Government

The government benefits from a stable agricultural sector. At the same time, SystemAgro constitutes an important element in coping with the consequences of climate change.

A stable and transparent system does much to ensure budget and planning certainty. A clearly defined level of expenditure allows the state to create a stable food supply and an economically sound agricultural sector over the long term. SystemAgro can be integrated into each country’s individual agricultural policy. Even ad-hoc public aid is integrated into the system. The government benefits also from using the insurance industry’s infrastructure to settle claims.

Specialist insurers

With their financial strength and know-how in agricultural insurance, specialist insurers can make long-term commitments and thus provide for stable risk transfer over the long term. Specialist insurers can offer farmers individual crop insurance covers. Unlike other systems, individual insurance coverage offers farmers what they need: reliable and adequate compensation in the event of a loss.