To ensure you recover from financial losses owing to natural phenomenon, you need insurance cover. Here are three packages you can’t afford to skimp on.
South Africa’s shifting (drier) weather patterns place pressure on agriculturists to use their money in better ways when it comes to improving crop yield. But, cutting insurance cover to improve cash-in-hand to do this places you in harm’s way. Not having crop insurance could cost you in the long-term.
Industry experts say that grain crops and other commodities are often wiped out in a natural disaster such as hail – which is more prominent in times where drought is concerned. If you haven’t taken out insurance on your crops, how do you plan on recovering from such an incident?
Related: Mitigate risk with crop insurance
“The greatest misconception is that it’s impossible to manage risk in agriculture. Because of the sector’s volatility, proper [risk] management is essential to ensure long-term sustainability. I can’t think of another sector where the saying ‘failing to plan is planning to fail’ is more true,” explains insurance specialist Daan Hugo.
Here are three natural disasters that you can insure your produce against, to ensure you aren’t left stranded and out-of-pocket:
In recent years, the severity of hail storms in South Africa has increased, leaving agribusiness owners vulnerable to crop damage. Depending on what time of year the hail hits, it could cause partial damage to crops, but farmers’ yields can potentially still recover.
However, if there is a major crop loss through hail, there isn’t much that can be done to recover it. Adequate insurance cover can protect you and enable you to plant a fresh season’s worth of produce without having to dip into your personal savings.
Farmers can insure their crops against both flooding and water logging, which are becoming more frequent with the abrupt changes in weather experienced over the country. Climatic shifts are forcing farmers to face a higher frequency of natural weather phenomena, such as a higher intensity of hailstorms, floods and even drought.
Variability in weather conditions is responsible for 80% of the fluctuations in agricultural production, industry experts say. Crops aren’t the only factor to consider when it comes to flooding, and you’ll need to insure your equipment and machinery too.
Related: Update your short-term insurance and save some cash
Considering that South Africa’s agri industries are still feeling the effects of drought, which started in 2015, this is a natural phenomenon that you’ll need to cover. “We can now, with a lot of confidence, say we are in a disaster in the maize belt. We will be lucky if we produce five million tonnes this year and then we will need to import five million tonnes. This is the sort of scenario that we are looking at,” says Jannie de Villiers, Grain SA’s CEO.
By insuring your agribusiness against the drought, farmers would have come out the other side with the capital to rejuvenate their land and production.
Choosing your crop insurance
“We have been involved with agriculture for many years and understand the risks associated with farming,” Standard Bank’s agri specialists say. Standard Bank protects your crops in the event of loss or damage caused by hail, wind, fire, while in-transit, and against riot damage. The following crops are covered by Standard Bank crop insurance: Maize, wheat, sorghum, soya beans, sunflowers, potatoes, fruit, and tobacco. If you need a solution, contact Standard Bank today.
- Apply for insurance to protect your crop from hail, flooding and drought.
- Standard Bank’s crop insurance also protects you from fire, wind, in-transit and riot damage.