Insurance for Farmer Protection: Indonesian Experience
Abstract
Agricultural sector is one of the most vulnerable business with high degree of uncertanties. Those sources of risks come from environment such as climate change, natural disaster, endemic pests, and also social economic change affected by international trade conflict. In order to mitigate the above mentioned risks, farmers opt to choose several strategies: (1) to diverse crops production (2) to modify ways of post harvest handling and pocessing in marketing their products, (3) to finance their cultivation by accessing financial institutions and last but not least (4) by protecting their business using agricultural insurance. Majority of smallholder farmers in Indonesia are un-tabbed group who are still lacking their knowledge about insurance. Compared with that of other countries, Indonesia should provide the minimum subsidies of agricultural insurance approximately 40% of the total investment (USA covers 25% of farming total loss, Brasil 50%, Mexico 80%).This paper shares some insight on Indonesian agricultural insurance, its best practice and future recommendation for better policy decision-making. Agricultural insurance in Indonesia has been initated since 2012 through pilot testing in two main commodites, namely paddy insurance (AUTP) and cattle insurance (AUTP). This initiave has been growing well. Further, Ministry of Agriculture formulated road-map of agricultural insurance for the year 2015-2019, with a set target of coverage for AUTP 1 (one) million ha and for AUTS 120.000 heads of cattle per year starting form 2016; and a period of insurance and total premium of 4 months and IDR 180.000; and 1 year and IDR 200.000 for rice and cattle, respectively. The realization of this target has been consistently increasing from 23.30% in 2015 to 50.00% in 2016 and 51.14% in 2017, and at the same time its coverage areas ha also been widened.
Downloads
References
Anonymous. 2012. Undang-undang Republik Indonesia No. 18 Tahun 2012 tentang Pangan. Luk.staff.ugm.ac.id/atur/UU18-2012Pangan.pdf.
Anonymous. 2015. Peraturan Menteri Pertanian RI No. 40/Permentan/SR.230/7/2015. Perundangan.pertanian.go.id/admin/file/Permentan%2040-2015%20Fasilitasi%20Asuransi.doc.pdf.
Anonymous. 2017a. Keputusan Menteri Pertanian RI No. 15/Kpts/SR.230/B/05/2017 tentang Pedoman Bantuan Premi Asuransi Usaha Tani Padi. Psp.pertanian.go.id/assets/file/2017/Pedoman%20AUTP%202017.pdf.
Anonymous. 2017b. Keputusan Menteri Pertanian RI No. 12/Kpts/PK.240/B/04/2017 tentang Perubahan Atas Pedoman Bantuan Premi Asuransi Usaha Ternak Sapi. Psp.pertanian.go.id/assets/file/2017/Pedoman%20AUTS%202017.pdf.
Anonymous. 2015. Peraturan Menteri Pertanian RI No. 40/Permentan/SR.230/7/2015 tentang Fasilitasi Asuransi Pertanian. Perundangan.pertanian.go.id/ admin/file/Permentan%2040-2015%20Fasilitasi%20Asuransi.doc.pdf.
Asian Productvity Organization (APO). 1999. Development and Operation of Agricultural Insurances in Asia. Asian Productvity Organization, Tokyo
Barus, TN, 2000. Kesiapan Industri/Perusahaan Asuransi dalam mendukung Pembangunan Pertanian dengan Meletakkan Landasan Design “Crop Insurance” yang Konseptual Berdasakan Pengalaman Menangani Asuransi Growing Tress/Timber. Makalah disampaikan pada Seminar Nasional Sehari: Perspektif Usaha Asuransi Pertanian Indonesia. Jakarta 20 Juli 2000
Bassoco, LM., C. Cartas and RD. Norton, 1986. Sectoral Analysis of the Benefits of Subsidized Insurance in Mexico dalam Hazell et al (eds): Crop Insurance for Agricultural Development. John Hopkins University Press, Baltimore and London.
Binswanger, HP. 1986. Risk Avesion Collateral Requirements and the Markets for Credit and Insurance in Rural Areas dalam Hazell et al (eds): Crop Insurance for Agricultural Development. John Hopkins University Press, Baltimore and London.
Buchanan, JM. 1975 “The Samaritan’s Dillema” In Altruism, Morality and Economic Theory. In: ES. Phelps (ed), New York: Russel Sage Foundation. Pp 71-85.
DJPSP. 2017. Pedoman Bantuan Premi Asuransi Usaha Tani Padi TA 2017. Psp.pertanian.go.id/assets/file/2017/Pedoman%20AUTP%202017.pdf.
DJPSP. 2017. Pedoman Bantuan Premi Asuransi Usaha Ternak Sapi TA 2017. Psp.pertanian.go.id/assets/file/2017/Pedoman%20AUTS%202017.pdf.
Harsh. SB, LJ, Connor and GD. Schwab. 1981. Managing the Farm Business, Michigan State University Press, Michigan
Hazell, P., LM Bassoco and G. Arcia. 1986. A Model for Evaluating Farmers’ Demand for Insurance: Application in Mexico and Panama. Dalam Hazell et al (eds): Crop Insurance for Agricultural Development. John Hopkins University Press, Baltimore and London.
IPPC 2001, Climate Change 2001: Impacts Adaptation and Vulnerability. Contribution of Working Group II to the Third Assessment Report of the Intergovernmental Panel on Climate Change [McCharthy James J. Canziani Osvaldo F. Leary Neil A. Dokkern David J, and White Kasey S. (eds)]. Cambridge University Press, United Kingdom and New York, USA 1032pp.
McCarl Adams and Hurd (2001). Global Climate Change and its Impacts on Agriculture. http:// agecon2.tamu.edu/people/faculty/mccarl-bruce/papers/879.pdf
Mishra P.K. 1999. Planning for the Development and Operation of Agricultural Insurance Schemes. in APO. Development and Operation of Agricultural Insurances in Asia. Asian Productvity Organization, Tokyo
Nurmanaf, AR, Sumaryanto, Sri Wahyuni, E. Ariningsih, Y. Supriatna, 2007. Analisis Kelayakan dan Perspektif Pengembangan Asuransi Pertanian pada Usaha Tani Padi dan Sapi Potong.
Richard E. Just, Linda Calvin, and John Quiggin (1999). Adverse Selection in Crop Insurance: Actuarial and Asymmetric Information Incentives. American Journal of Agricultural Economics, Vol. 81, No.4.
Sakurai T. 1997. Crop Production under Risk and Estimation of Demand for Formal Drought Insurance in the Sahel. Part of PhD Dessertation of Essays on Uncertanty and Sustainability in the Semi-Arid Tropics, Michigan State University
Saliem HP and Supriyati. 2006. Diversifikasi Usaha Tani dan Tingkat Pendapatan Petani di Lahan Sawah. Makalah disampaikan dalam “ÄGRIDIV in Country Seminar: Poverty Alleviation through Development of Secondary Crops” Bogor, 23 March 2006.
Siamwalla, A. and A. Valdes. 1986. Should Crop Insurance be Subsidized? Dalam dalam Hazell et al (eds): Crop Insurance for Agricultural Development. John Hopkins University Press, Baltimore and London.
Soewito, M. 2000. Kesiapan dan Prasyarat Lembaga Asuransi Dalam Mendukung Asuransi Pertanian di Indonesia. Makalah disampaikan pada Seminar Nasional Sehari: Perspektif Usaha Asuransi Pertanian Indonesia. Jakarta 20 Juli 2000.
Sumaryanto. 2006. Faktor-faktor yang Mempengaruhi Keputusan Petani Menerapkan Pola Tanam Diversifikasi: Kasus di Wilayah Pesawahan Irigasi Teknis DAS Brantas. Makalah disampaikan dalam “ÄGRIDIV in Country Seminar: Poverty Alleviation through Development of Secondary Crops” Bogor, 23 March 2006.
Tsujii, H. 1986. An Economic Analysis of Rice Insurance in Japan. Dalam Hazell et al (eds): Crop Insurance for Agricultural Development. John Hopkins University Press, Baltimore and London.
Walker, TS and NS. Jodha. 1986. How Small Farm Households Adapt to Risk? Dalam Hazell et al (eds): Crop Insurance for Agricultural Development. John Hopkins University Press, Baltimore and London.
Copyright (c) 2019 IJRDO - Journal of Agriculture and Research (ISSN: 2455-7668)
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Author(s) and co-author(s) jointly and severally represent and warrant that the Article is original with the author(s) and does not infringe any copyright or violate any other right of any third parties, and that the Article has not been published elsewhere. Author(s) agree to the terms that the IJRDO Journal will have the full right to remove the published article on any misconduct found in the published article.
