Farming is one of humanity’s oldest pursuits, and it still remains one of the most challenging - despite all our technological processes. With climate change, the weather is becoming increasingly unpredictable, posing a significant risk for farmers. Traditional solutions aren’t enough anymore - and that’s why agriculture insurance is also evolving.
South Africa is a water-scarce country and faces significant risks for both floods and drought. For emerging farmers in particular, insurance has often been difficult to access - especially as they lack the resources of large commercial farming enterprises. Established farmers have benefited from crop insurance, protecting them against hail, fire and floods, but sometimes these products aren’t suitable for smaller farmers.
That’s why Santam Agri is introducing a new breed of crop insurance. Weather index insurance compensates policyholders if the index moves above or below predetermined thresholds. Think of it as the next level of farmer insurance.
How weather index insurance works
Both commercial and smallholder farmers can benefit from this product. It’s designed to protect farmers who suffer losses arising from specific weather-related events, such as excess rainfall, as well as drought. Index cover works best when there are enough farmers in a specific area who take up the policy.
Rainfall readings are taken by satellite, and payouts are made automatically, with no need for assessors to visit the area. With this satellite rainfall data, Santam is able to assess whether rainfall patterns for a specific area are meeting expectations or not.
As this is a new product that hasn’t been offered before, Santam has held training sessions in Sekhukhune with PHAHAMA GRAIN PHAKAMA (PGP) farmers mentored by Grain SA to get their feedback.
The benefits of crop protection
With weather index insurance in place, farmers everywhere can plan with confidence and build their resilience. Simplicity is built into the cover - there’s no need for extensive paperwork or inspections - and premiums are kept affordable. When you need the money, payouts are quickly processed. You can start thinking about how to take the next steps in your farm - perhaps adding new technology, such as drones, or trying an additional crop.
Agriculture insurance that covers your whole farm
Your farm is more than your crops. Get peace of mind when you have asset insurance that looks beyond your crops to include vehicles, buildings, farm implements, guesthouses, liability, and more. Check that you have sufficient cover against risks such as fire and dam bursts, as well as legal liability in case of human error that affects your neighbour’s land or the public.
Santam is the leader in farm insurance solutions
Santam has over 100 years of experience in farm insurance, so we understand this sector inside and out. We are your partner in agriculture, and we invest in effective risk management to protect your livelihood and investments. We have vast experience, country-wide infrastructure, and a comprehensive offering so that you can get the cover that’s right for you.
To learn more or to register for weather index insurance, speak to your local Santam representative.