UNAIR NEWS – Technically, business activities in the agricultural sector will always face with a high risk of uncertainty. The risks of uncertainty include crop failure caused by natural disasters such as floods, droughts, or attacks from plant-disturbing organisms, and climate change.
The method to analyze it done by determining agricultural losses, through agricultural products and not basing it on the price of what is planted in the soil at a particular time.
In addition to acting as a provider of subsidies for agricultural insurance premium payments, Law Number 19 of 2013 concerning Protection and Empowerment of Farmers also specifically mandates the government, both central and regional, to take part in acting as insurance companies in the event of a 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 in accordance with their authorities are obliged to protect farming activities carried out by farmers as referred to in Article 12 paragraph (2) in the form of agricultural insurance, ” explained Zahry Vandawati, legal expert from Universitas Airlangga.
According to Zahry, agricultural insurance companies must provide farmers’ rights in accordance with the agreed agricultural insurance policies. Agricultural insurance companies can treat and serve farmers correctly, provide information transparently, with good faith, and provide compensation in accordance with agricultural insurance agreements.
The purpose of the insurance program, can be divided into several target groups, for farmers, to make farmers aware of the risk of crop failure or farming failure and encourage farmers to improve their skills and improve management of agricultural businesses.
Then, reduce the dependence of capital farmers from other parties and help farmers provide production costs or livestock business capital and increase farmers’ income from the success of farming or livestock businesses on an ongoing basis.
For the insurance companies, the aim is to open up new business branches in the form of risk protection for agricultural businesses with farmers as customers and improve ability of insurance company employees in risk management in the agricultural sector.
The responsibility of insurance companies related to agricultural insurance, said Zahry, is to provide compensation to farmers in the event of losses caused by risks such as floods, droughts and attacks from plant pests as guaranteed on the Farmers’ Farm Business Insurance policy.
“And one of the most important, is legal protection for farmers so that insurance agreements on food security programs by the government can provide farmers’ rights as mandated by the Act,” she concluded.
Author: Fariz Ilham Rosyidi
Editor: Nuri Hermawan
Zahry Vandawati, Rizki Darmawan dan Hilda Yunita Sabrie, 2019. Perjanjian Asuransi Pertanian Pada Program Ketahanan Pangan Oleh Pemerintah, Jurnal Hukum dan Pembangunan, Vol.49, No. 3.