Chile’s agriculture sector is significantly impacted by natural hazard-induced disasters, including climate related events. Due to the expected increase in the frequency and severity of these hazards and their adverse impacts on agriculture, appropriate and effective disaster risk reduction measures should be undertaken to help reduce the underlying vulnerabilities and risks to the sector.

The country’s national agroclimatic risk information system includes a series of interconnected platforms, various agroclimatic information bulletins, tools and initiatives to monitor, identify, assess and communicate the risks. In addition, capacity development events and trainings are organised to enhance awareness raising among key stakeholders on the availability, access to, and usage of, these agroclimatic information products. This informs decision-making of agricultural stakeholders to avoid and reduce the adverse impacts of natural hazard-induced disasters.

A variety of financial instruments are available to fund emergency response and recovery activities in the agriculture sector and to transfer risk through the provision of state subsidies for agricultural insurance. Through the systematic collection, sharing and analysis of data among various agencies, a better understanding can be obtained about the farmers that are regularly affected, the types of events and the kind of assistance they are receiving. This will help to produce information that can inform as well as enhance decision-making about the implementation of disaster risk management strategies and agricultural programmes and policies.

Agro-insurance is a key pillar of Chile’s agriculture Disaster Risk Management strategy. Government subsidies are currently provided by the Chilean Economic Development Agency’s Agricultural Insurance Committee – Agroseguros, which was established in 2000 to increase awareness of agricultural insurance and establish market conditions (e.g. subsidies) to make it more viable for different types of agricultural products. The total subsidy cannot exceed 80 UF7 (USD 2 880) per policy and 120 UF (USD 4 320) per type of crop and livestock for the beneficiary farmer. Every type of producers in the crop, livestock and forestry subsectors (large-, medium-, small-sized companies, microenterprises and small producers) is eligible for this agricultural insurance state subsidy. Most of the insurance products purchased are for garden vegetables and grains, followed by industrial crops, and then fruits and livestock, although insurance coverage of the latter two has increased substantially over the last few years.

In addition, INDAP’s Agricultural Insurance Support Programme (PACSA) is available to assist smallholder and subsistence farmers in purchasing an agriculture insurance policy. PACSA will complement the Agroseguros subsidy up to 95% of the net premium cost unsubsidized by Agroseguros. The maximum net co-payment farmers may receive is 5% for annual crops, 10% for fruit trees, 5% for bovines, 5% for sheep and 5% for apiculture.

Combined, MINAGRI and INDAP allocated a total of roughly USD 10.2 million to subsidize agricultural insurance in 2019. Individual beneficiaries included microenterprises (56%), small businesses (31%), medium-sized enterprises (8%) and large companies (5%) (Vega, 2020[12]). While all types of agricultural producers may participate in the programme, smaller and less-resilient farmers benefit the most. However, the exact number of beneficiaries is currently unknown because only the total number of policies that are subsidized are documented and one single beneficiary can receive subsidies under several policies.

SOURCE: OECDiLibrary