| Throughout history, agriculture has progressed as an outcome of farmers’ efforts to design and apply adaptation strategies aiming to mitigate the impact of adverse meteorological phenomena on their farms’ economy.
The survival and sustainability of farmholdings, regardless of size or type of production, is directly related to their capacity to withstand the consequences of such phenomena and continue to yield a harvest year after year. While substantial differences can be identified in the intensity and frequency of the damage borne, depending on the country, region and type of production, no farm is exempt from the effects of uncontrollable risks.
In this endeavour to mitigate such consequences and successfully manage natural risks, the first protective step must be taken by the farm itself, which must adopt measures that pursue more favourable crop development or a heightened ability to handle risks and their adverse effects.
But when the damage inflicted is of an intensity that cannot be accommodated by the farmer, instruments must be deployed that spread or transfer risk to third parties, a process known as risk insurance.
Experience shows that of the various such instruments in place, insurance constitutes the most appropriate risk management model and the one that has reached the highest levels of development and acceptance among farmers. |