Blocking rural insurance reinforces lack of predictability, says sector

The blocking of R$461.7 million from the PSR (Rural Insurance Premium Subsidy Program) budget for 2026 reinforces the lack of predictability of one of the main risk management policies in Brazilian agriculture, according to an assessment by FenSeg (National General Insurance Federation).

For the entity, the recurrence of cuts and contingencies makes planning difficult for rural producers, insurance companies and the government itself, especially in a scenario of greater exposure to extreme weather events.

With the measure, the initially planned budget of R$1.1 billion for the program was reduced to around R$638 million. Of this total, approximately R$100 million had already been used, leaving just over R$500 million available to support the contracting of insurance by rural producers.

In FenSeg's assessment, the instability in the allocation of resources occurs at a time considered sensitive for the sector. Warnings about the possible formation of a new cycle of the El Niño phenomenon indicate the possibility of severe weather events in different producing regions of the country, increasing the importance of protection instruments for agricultural activity, the entity said in a note.

The president of the FenSeg Rural Insurance Commission, Daniel Nascimento, stated, in a note, that "extreme weather phenomena are already part of the reality of Brazilian agriculture and, therefore, need to be incorporated into the planning of public policies".

However, according to the president, "more worrying than the occurrence of a climate event, which today can be monitored and anticipated, is the uncertainty regarding the availability of resources destined for the subsidy."

He said, in a note, that "the new blockage of PSR resources highlights a problem that has been compromising the expansion of protection in the countryside for years: the lack of budget predictability. Rural insurance is a risk management instrument that depends on long-term planning on the part of producers, insurers and the government itself."

FenSeg points out that the effects of this instability can already be observed in the area protected by the program. Data presented by the entity show that coverage supported by the PSR increased from approximately 13.7 million hectares in 2021 to approximately 3.2 million hectares in 2025.

For FenSeg, the reduction in coverage "highlights the need to guarantee greater predictability to public policy", allowing more producers to have access to risk management instruments.

The entity also stated that it is monitoring the processing of Bill No. 2,951/2024 in the Senate. The proposal, recently approved by the Chamber of Deputies, seeks to update the legal framework for rural insurance, with measures aimed at expanding legal certainty and creating mechanisms that favor greater stability for public policy.

Source: CNN