Senators approve urgency for rural insurance.

Bill 2,951/2024, which creates a new legal framework for Rural Insurance, will be a priority on the voting agenda of the Federal Senate. The House Plenary approved, this Wednesday (15), the urgency procedure for the matter, which accelerates its processing. With this, the expectation is that the proposal will be considered in the first week of August, upon the return from the parliamentary recess. The proposal is one of the priorities of this year for the Parliamentary Agricultural Front (FPA). The topic gained strength with the increase in default on rural credit and the decrease in resources for the Rural Insurance Premium Subsidy Program (PSR). The matter is authored by the vice-president of the FPA, Senator Tereza Cristina (PP-MS), and was reported in the Senate by Senator Jayme Campos (União-MT). For the former Minister of Agriculture, the project represents the beginning of the construction of a more stable policy of protection for the producer, with predictable resources and conditions to expand the coverage of Rural Insurance. “The first point is the mandatory nature of the resource. The resource needs to be guaranteed, and this is one of the issues about which the government still has doubts. I think it needs to be this way, because it brings predictability both for insurance companies and for rural producers,” he explained. In the Chamber of Deputies, the text underwent adaptations in the report by Deputy Pedro Lupion (Republicanos-PR), president of the FPA. The changes were to improve the collection and management of resources for the PSR and also to seek alignment with suggestions sent by the Executive branch. “We can't have a thriving, competent, and strong agricultural sector, as we have today, without any kind of security or with paltry insurance, as we have currently,” criticized Lupion.

Budgetary predictability and a Catastrophe Fund are key highlights of the proposal.

The approved project indicates changes to three existing laws. One of them is the Rural Insurance Subsidy Law (Law No. 10,823/2003). The most impactful aspect concerns budgetary predictability; therefore, the proposal stipulates that subsidy resources cannot be subject to contingencies or blockages. Another change to this law is the inclusion of incentives for producers to contract insurance, such as more attractive interest rates, preferential access to credit, and financing of the insurance premium. The text reinforces that contracting insurance will not be linked to credit, but provides positive encouragement by including these advantages. In the Chamber of Deputies, the report by the president of the FPA (Parliamentary Agricultural Front) introduced a new element by including surplus funds from the Agricultural Activity Guarantee Program (Proagro) among the resources. The objective is to balance these amounts, provided that this does not harm the small farmers served by Proagro. There are also changes to the Rural Insurance Stability Fund Law, which will become the Catastrophe Fund. The modifications aim to unlock the fund's potential, as the assessment is that in its current form, the government and companies are unable to participate as investors. One innovation is the possibility of creating sub-funds, with separate assets earmarked for specific sectors. Furthermore, the Catastrophe Fund may acquire Insurance Risk Notes (LRS), provided that this instrument is chosen by the fund's management.

This text was translated by machine from Brazilian Portuguese.