Thinking About Taking Farm Insurance

Article: Matshediso Motshabi

Growing commercialization of agriculture is a trend. As one of the key industries for economic diversification, there are currently legislation and policies in place to support the expansion of the agricultural sector. Given that they harvest no less than 2 hectares of land per crop, the majority of farmers in Botswana are classified as small-scale. A few small-scale farmers have transitioned to emerging, or more accurately mid-sector farming, which can produce 5 or more hectares for each crop. It is well known that the more hectorage and yield your produce has, the more susceptible it is to risk. At this point, farmers might think about the plausibility of insuring their farms, properties, and employees. Another good reason to purchase farm insurance is the likelihood of unforeseen circumstances like disease outbreaks, harsh effects of climate change, skyrocketing inflation, high food prices, and the cascading effects of foreign conflicts and treaties on our nation.

The various types of farm insurance policies can be divided into three major groups: home and belongings coverage, farm buildings and property coverage, and liability insurance. The first is comparable to a standard home-owners policy, but it carries a higher risk because of the location and potential for local natural disasters occurring.

As it covers crops, livestock, storage facilities, animal shelters, boreholes, and farm machinery, the second farm insurance policy, Farm Buildings and Property Cover Building, is one of the most crucial ones. While your crops are insured based on market demand, the number of hectors sown, and your animals are insured based on quantity and productivity, each of these buildings are covered based on its value, age, and structural condition. Some policies merge this with Home and Contents coverage, covering both your personal residence and these buildings. Tractors, combined harvestors, trailers, and other types of equipment are also covered by this section of your farm insurance policy. Farm Machinery Coverage is all-inclusive because it safeguards the machines and vehicles you use every day to cultivate, grow, or raise the products of your farm. The majority of farm equipment is, however, insured according to its actual value rather than how much it would cost to replace it with something new, and it is crucial to update this policy on a regular basis as farmers replace old equipment or its parts with new ones, plant new crops, and require different types of harvestors, among other things. Modern farmers are aware of the importance of technology and machinery to running a successful operation. Therefore, this insurance covers your farm’s equipment and ensures that you can continue operating even in the event of a catastrophe. Farm equipment may be included in a specific policy that provides a total amount of protection for all of your possessions, scheduled, or added one at a time.

The latter insurance plan for farmers, called Farmer’s Liability, pays for medical expenses and other costs associated with injuries to you and your employees in the event of any causality that is certain to occur during farm operations, such as when you hurt yourself while trying to handle your livestock. Legal fees, court costs, and other payments resulting from mishaps on your property are also included. For some reason, despite being frequently the least expensive component of your Farmers Insurance policy, it is still disregarded.

There are a number of reasons to think about getting farm insurance, including the following:

1. If you are actively engaged in farming as a full-time business, you need to have sufficient insurance coverage to protect your assets in the event of a catastrophic event, like any other business venture.
2. To defend your farmhouse and belongings from disasters like veld fires, flooding, and other unintentional losses.
3. To insure farm machinery and equipment because they represent a sizable investment for any farmer and are essential to the efficient operation of farming.
4. To protect your farm’s production inputs (crops and livestock) from unforeseeable events like theft, disease outbreaks and erratic market conditions.
5. To offer medical assistance and compensation in the event of an accident, as most farming operations are risky.

I believe there are financial institutions in Botswana that do provide partial or full farm insurance policies. You, as a farmer, are responsible for learning how to access them and what each coverage entails. Make sure you do proper research before deciding for a particular farm insurance policy. FMB