Why insurance is a must-have for farmers

Agricultural insurance is vital for the country’s long-term food security.
Farmers do not have to wait for Sasria insurance cover to kick in – it is effective immediately. Picture: Shutterstock

Sasria is a trusted specialised short-term insurance company that offers cover for special risks and losses arising from occurrences such as civil commotion, public disorder, labour unrest, strikes, riots and terrorism.

We sat down with Sasria’s acting head of customer relations management Letlhogonolo Tau to find out more about the forms of insurance they offer to the agricultural sector and why this plays an important role in sustaining South Africa’s long-term food security.

“It is difficult to secure a farm,” says Tau. “You can imagine a 50-hectare farm – because of the size of the property, the farmer has a high level of exposure to risks, which can result in significant damage to both personal and commercial assets.

“If there was a labour dispute on the farm and labourers go on strike and, given the increasingly violent nature of demonstrations in recent months, this can result in fences being cut and livestock being stolen or killed, as well as the farmer’s assets and produce being damaged. This would leave the farmer liable for the losses.”

Noting that there has been an increase in the number of strikes and riots taking place in the agricultural sector, Tau emphasises that it’s vital for farmers to be aware of this and the necessity to undertake Sasria cover to protect their assets.

Protecting against large losses

In late 2012, a series of farm workers’ strikes occurred in concentrated farming areas across the Western Cape as farm labourers wanted a sudden salary increase due to wages having been lowered. When farmers refused to comply with their demands, the labourers threatened to burn down the vineyards – and then followed through on their threat.

“The average loss was R800 000 per farmer, and that excludes the loss of jobs experienced. One of the biggest claims Sasria received was for over R200 million for damage to a warehouse and vineyard,” he recalls.

Then Tau points out the most tragic aspect of these events: some of these farmers were not insured. “If these farmers had had Sasria cover, they would have been able to pay for their losses. There have luckily been others Sasria has been able to help.

“Sasria processed another claim at a storage facility with produce that had to be exported overseas when the workers went on strike: it was close to R90 million in claims, which we covered, too,” he adds.

Sasria covers more

“Agricultural insurance is becoming sophisticated and complex. Farmers need good advice, and they rely on professional brokers to give them the right insight on how they can cover their assets,” says Tau.

There is no waiting period for Sasria insurance cover to kick in. “If farmers are given a sudden notification by their labourers that there will be a strike tomorrow, you can have Sasria cover today,” he explains.

Immediate insurance and immediate peace of mind sets Sasria far ahead of the rest. Furthermore, Sasria cover is non-refuseable and non-cancellable, which means it is also available as standalone cover in a scenario where a farmer cannot afford the underlying fire policy.

The cover which Sasria offers for the agricultural sector is comprehensive in the truest sense of the word.

“We cover both crops and assets; this would include covering the agricultural property for fire damage. We also offer specialised solutions that cover assets like machinery and livestock – both essentially beneficial for the farmer,” according to Tau.

Some farmers own pedigree animals, which are extremely costly to replace – and also need adequate cover, according to him. This can also be provided by Sasria.

They also insure the goods and produce that the farmer will produce. “If certain crops are harvested and there is a strike before there is a chance for the farmer to deliver the product to the market, Sasria will consider the merits of the claim,” he explains.

And even better news: goods in transit are also covered by their specialised risk insurance. “Imagine people transporting a load of bananas from Tzaneen to Durban and past Johannesburg. If there is a strike along this route that results in the truck getting damaged and the goods being looted, Sasria is there to pay for those losses,” Tau says.

The importance of having cover

The importance of insurance goes beyond protecting the farmer against the loss of assets. “Part of our mandate is to instil investor confidence, and we also make sure we minimise job losses,” he explains. This is of vital importance to both the farmer and the country as a whole.

“The agricultural industry plays a role for the country’s food security. If there’s no cover in place and the farmer loses his farm where he produces potatoes, it will impact national food security and result in job losses,” Tau adds. He notes that this is another reason why those in the agricultural sector should realise  that this is insurance they cannot do without.

How it works

“We work through mainstream insurance companies who have specially trained brokers who sell the product on our half,” says Tau. “At Sasria we follow the underlying policy and thus provide farmers with comprehensive cover on their crops, their livestock, their electronic equipment and their irrigation equipment – all insured against specialised risks that target the agricultural sector.

“One irrigation machine can cost a farmer about R1 million. If the machine is stolen and its owner is insured for comprehensive cover, Sasria will pay for the cost of the lost machinery,” Tau explains. “Let’s say there’s a strike and a stampede damages the crops, the farmer will again need insurance to ensure that they don’t lose the million they invested.”

Never think that insurance is the one thing you don’t need. “The risk exposure isn’t limited to the farms,” he adds. Even if there are no signs of a strike in your part of the world, there is still the chance that your produce could be affected in transit. “You are exposed, and it becomes important that you have comprehensive cover.”

Sasria is an insurance provide for specialised risk insurance, insuring clients against losses arising from occurrences such as riots, strikes and labour unrest.

For more information about the services they offer and how it can help you, visit their website here

Sasria is an authorised financial services provider (FSP-number: 39117)

Brought to you by Sasria.

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Does it include ‘the government legally took away my farm’ cover?

Timing of this article could not be worse. Really not much point in paying insurance on something that will be taken away from you in any case

Unfortunately this article is 4 months too late.

Land is now worthless and that is why so few residential sales going thru.

Estate agents in income meltdown.

SAICA (chartered accountants to the plebs) are in a quandary trying to find an International Financial Reporting Standard that deals with wholesale theft of a country. Companies (MANY OF THEM) grappling with how they will report their latest Financial Statements with land and probably fixed assets thereon worth absolutely S F A.

Covenants excecuted will make the financial meltdown of the unfortunate Christo Wise look like a Xmas school pantomime.

Banks uninvestable.

Thanks Cyril you doos.

Domestics and garden boys fired on farms and private households as desperate borrowers find that they are actually INSOLVENT.

Maybe the state owned SASRIA could expand their portfolio from “political riot strike and public disorder ” to include expropriation by thuggish Marxists, who by all accounts couldn’t run a bath let alone the national economy – that should raise a few bucks for the anc looting coffers in premiums!

End of comments.

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