UNAIR NEWS – Technically, business activities in the agricultural sector will always be faced with a high risk of uncertainty. The risks of uncertainty include the level of crop failure caused by natural disasters such as floods, drought, or attacks from plant-disturbing organisms, and climate change. Uncertainty and high risk are possible for farmers to switch to other commodities that have high economic value with a smaller risk of failure.
Risks to agriculture not only affect farmers but also have an overall influence on the agribusiness value chain. If this is allowed to continue, it is feared that it will affect the stability of national food security, especially the production and availability of staple food.
“One way to make compensation for crop failure initiated by the government is through food security programs. This program is run based on the principles of agricultural life that are advanced, ecologically friendly, and sustainable, “said Dr. Zahry Vandawati Chumaida S.H., M.H, a lecturer at Faculty of Law, Universitas Airlangga.
“The law must encourage and direct the technical life of agriculture to be more perfect and benefit all parties,” he continued.
The method of determining agricultural losses is through agricultural products and is not guided by the price of what is embedded in the land at any given time. In addition to acting as the provider of subsidies for agricultural insurance premium payments, Law Number 19 of 2013 concerning Protection and Empowerment of Farmers also specifically mandates both the central and regional governments to take part as insurance companies in the event of loss of crop failure. Article 37 paragraph (1) of Law Number 19 Year 2013 Concerning the Protection and Empowerment of Farmers explains that the Government and Regional Governments under their authorities are obliged to protect the farming activities carried out by farmers as referred to in Article 12 paragraph (2) in the form of agricultural insurance.
“So, in the case of crop failure in article 37 paragraph (2) of Law Number 19 of 2013 concerning Protection and Empowerment of Farmers, namely due to natural disasters, attacks on plant pests, climate change and other types of risks, the government is mandated to protect farmers who experience losses, “said Dr. Zahry.
Dr Zahry said agricultural insurance companies must provide farmers’ rights under the agreed agricultural insurance policies. Agricultural insurance companies must treat and serve farmers properly, provide information transparently, in good faith, and provide compensation under agricultural insurance agreements.
“In addition to agricultural insurance, legal protection for farmers will enable farmers to work optimally in carrying out agricultural production,” he said.
The objectives of the agricultural insurance program can be divided into several target groups, namely for the target groups of farmers, local governments, and insurance companies. The responsibility of insurance companies related to agricultural insurance is to provide compensation to farmers in the event of losses caused by risks such as floods, droughts and attacks of plant pests that are guaranteed on the Farmer Farmers Business Insurance policy. Under the characteristics of agricultural insurance, it protects farmers in case of crop failure and the existence of premium payment assistance.
Dr Zahri explained that the legal protection for farmers of agricultural insurance agreements on food security programs by the government is to provide farmers’ rights as mandated by the Act. It also protects the National Consumer Protection Agency and Non-Governmental Consumer Protection Institutions.
“The form of farmers’ legal protection is also regulated by financial service institutions which are implementing agencies in the insurance sector. Providing facilities and making it easier for farmers to submit claims to insurance companies appointed by the government, Jasindo, “he concluded. (*)
Author: Sukma Cindra Pratiwi
Editor : Khefti Al Mawalia
Zahry Vandawati, Rizki Darmawan dan Hilda Yunita Sabrie. 2019. Perjanjian Asuransi Pertanian Pada Program Ketahanan Pangan Oleh Pemerintah. Jurnal Hukum dan Pembangunan.