Insurance covers you against volatility and uncertainty but unfortunately, according to Liché Strydom, product developer at King Price Insurance, there are many misperceptions around it. He believes that it should be a big part of farmers’ risk management framework.
Strydom joins us on this episode of Farmer’s Inside Track to share his insights on agricultural insurance and why farmers should never overlook incorporating an insurance plan into their agribusiness from day one. He explains that the goal of insurance is to protect farmers and to have a back-up plan in case of emergencies.
“The first thing that you need to do is consider what your most valuable asset is. For a lot of these farmers, it is their crops or they might have a tractor. Any risk management journey begins with a journey.”
Which option should you consider?
Strydom debunks the myth that insurance is prohibitively expensive and says that there are options available that will cater to your needs.
“People need to start understanding it’s better to have cover, than no cover.”
He adds that it is common for people to regret not having it after the damage has already been done.
“For the whole value chain, I think insurance is playing a massive role, in a sense that if a bank is giving you a loan or microfinance, then they also want some type of security; and if you have cover, that provides the security there.”
Strydom says that they collaborate with insurance brokers so that farmers can determine which assets are critical to their business based on their budget. Even small-scale farmers can afford it once they understand how it works, he adds.
ALSO READ: All you need to know about agri-insurance
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