The Brazilian agricultural ministry is working to make up the gap between what the ministry has planned for agricultural insurance subsidies and what has so far been budgeted by congress, a spokesperson for the ministry told BNamericas.

The ministry planned 451mn reais (US$251mn) in subsidies in 2010, 570mn reais in 2011 and 680mn reais in 2012, but has so far only had 238mn reais approved by congress. The 2010 planned number would be 66% higher than the actual subsidy offered in 2009.

While the government is working on a number of other measures to improve insurance coverage in rural and agricultural areas, there is also a push to get funding back for the large increase in subsidies that the ministry wants, spokesperson Débora Pinheiro said.

RURAL CATASTROPHE FUND

The government’s signature effort on agricultural risk in 2010 will likely be the rural catastrophe fund that Brazil’s lower house approved last week.

The fund would put as much as 4bn reais in government securities behind the project and be run by an offshoot of federally controlled reinsurer IRB-Brasil Re. The agriculture ministry is planning for a significant increase in insurers’ interest in covering the sector, particularly in areas of Brazil with the most volatile climates.

However, it still needs senate and presidential approval, and agriculture minister Reinhold Stephanes does not see it coming into effect before crop year 2011-12, which would make its start date after July 2011, said Pinheiro.

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