Analysis of Implementation of Rice Farming Insurance: Case Study In Indonesia

Abstract

Since 2015, the Indonesian government has been running rice farming insurance in a national scale. This insurance product provides cover for crop failures caused by flood, drought and plant pest organisms attack.  The government has appointed PT Jasa Indonesia (Jasindo) Insurance, state-owned insurance known as strong in the retail segment to provide insurance cover for rice farmers. Rice farming insurance provides a maximum compensation of Rp 6 million per hectare per planting season, in case of crop failure. The total premiums to be paid Rp. 180,000 per hectare per planting season. The government bears 80% or Rp.144.000 per hectare per planting season, while farmers bear 20% or Rp. 36,000 per hectare per planting season. The government targets 1 million hectares of land to be covered by insurance rice farming, and so far has not been achieved. Up to May 2016, there were only about 23.7% of the land that has been successfully insured or a new approximately 237,036.19 hectares. Insurance marketing of rice farming is also stymied a shortage of human resources (HR), despite getting help from the Indonesian army personnel. This study aims to analyze the implementation of rice farming insurance provided by PT. Jasa Indonesia (Jasindo) Insurance. The study was conducted using in-depth interviews and data from PT. Jasa Indonesia (Jasindo) Insurance, Indonesia Ministry of Agricultureand Indonesia Central Bureau of Statistics. There are some obstacles predominantly on marketing side such as : lack of qualified manpower, uncertain spending on resources, inadequate resource for data collection, widespread coverage, traditional loss coping mechanism, poor perception of insurance, low insurance minded. Then subsequently made the development strategy for marketing rice farming insurance in the future and as an alternative improvement for PT Jasa Indonesia (Jasindo) Insurance.

Keywords : rice farming insurance, crop insurance in indonesia