Agricultural Market Insurance Development : Policy Note - Brazil

Over the last decades, the government of Brazil has developed a risk management strategy with the goal of reducing the volatility of cash flow in the agricultural sector and the vulnerability of the less privileged stakeholders in the rural areas (that is, family farmers). Setting up a comprehensive national agriculture risk management strategy (and subsequent plan and policy) and ensuring an effective inter-institutional and inter-departmental coordination, can be a more effective way than merely increasing the budget of existing programs (or creating new ones) to reduce the exposure of the agricultural sector to shocks. In this regard, most stakeholders in Brazil agree that existing agriculture risk management programs in Brazil should be reviewed with the aim of improving the allocation of fiscal resources and guaranteeing a greater positive impact on programs' target population. to this end, Brazilian authorities are looking to learn from international experiences and examining an integrated public-private partnership (PPP) system for agricultural insurance that helps the government (both federal and state) to improve fiscal resilience to shocks and reduce farmers' vulnerability to disasters. The objective of the policy note is to identify the opportunities in the improvement of the agricultural insurance system through policy and program reform. In particular, the note focuses on: (i) the strengthening of the existing legal and regulatory framework, (ii) the institutional and operational framework, and (iii) the improvement of existing government funded programs