Lack of Socialization, Agricultural Insurance Has Not Reached Target ~ Insurance Academy
REPUBLIKA.CO.ID, JAKARTA — Center for Indonesian Policy Studies (CIPS) researcher Galuh Octania assesses that the Rice Farmers Agricultural Insurance Program (AUTP) is still not well socialized to farmers. As a result, the AUTP program has not reached its target.
In fact, the agricultural sector, including in Indonesia, continues to be faced with challenges related to production and productivity. In particular, climate change which causes delays in the harvest season and also the threat of crop failure.
Galuh said the AUTP program was a solution to compensate for losses that could be caused by the impact of various challenges on the agricultural sector. AUTP provides protection against the risk of uncertainty by guaranteeing farmers to get working capital for farming from insurance claims.
“Unfortunately, because it is still rarely socialized, this program still lacks interest,” he said in a release received by Republika, Monday (9/12).
Based on data from the Financial Services Authority (OJK) as of July 31, 2019, only around 392,649 hectares of land are protected by the AUTP program. This amount is only equivalent to 39.26 percent of the target of one million hectares of land in 27 provinces.
The number of farmers who participated in this program was 676,455 people. Meanwhile, the amount of premiums that have been paid is Rp 70.67 billion and the number of claims that have been paid has reached Rp 10.94 billion.
Galuh added that the socialization for this program needs to be improved to increase farmer participation rates. The socialization did not only focus on the benefits of AUTP, but also the binding terms and conditions in insurance. The requirements regarding the submission of AUTP membership and claims should also be simplified so that they are easy to understand.
Galuh assessed that AUTP is one of the important programs in social protection programs for farmers, in addition to the Healthy Indonesia Card (KIS), Smart Indonesia Card (KIP) and the Family Hope Program (PKH). For this reason, the government needs to intensify various efforts related to the socialization of AUTP.
“The capacity building program for parties directly involved in this program is also important to improve service quality,” he said.
No less important, the government needs to expand insurance coverage from rice farmers to other food commodity farmers. Another suggestion from Galuh is the establishment of additional partnerships with private insurance companies with the aim of complementing PT Jasindo’s reach throughout Indonesia.
Galuh added that the government should consider using agricultural insurance as an investment opportunity for these companies. “That way, the government can reduce the burden of insurance premium subsidies gradually and divert it to improve the quality of AUTP services,” he said.
