Land Bank warns of insurance risks for emerging farmers

Land Bank Insurance Company laments low rate of emerging farmers’ insurance coverage. Photographer: Ayanda Ndamane African News Agency (ANA)

Land Bank Insurance Company laments low rate of emerging farmers’ insurance coverage. Photographer: Ayanda Ndamane African News Agency (ANA)

Published May 23, 2024


The Land Bank has warned that the low rate of insurance coverage among new era (emerging) farmers was a major concern as it meant that many of these farmers were potentially exposed to risks that could effectively shut down their farming operations.

Pascal Siphugu, managing director of Land Bank Insurance Company, today urged emerging farmers to gain understanding and appreciation of the importance of insuring their farming assets, as unforeseen events could have a catastrophic impact on their ability to continue farming.

“We would like to strongly encourage emerging farmers to insure their assets, including livestock, crops, equipment and buildings in the event of an unfortunate and unforeseeable event,” Siphugu said.

“Without insurance coverage, these farmers could see their operations effectively wiped out and it would be almost impossible for them to re-establish themselves in the sector.”

Siphugu said that not being insured against a catastrophic event could easily destroy all the hard work that these farmers put in with the support of the Land Bank.

“It is simply not worth taking the risk,” he said.

The Land Bank Insurance Company has a strong social mandate to help with food security, rural crime and curb unemployment in rural economies.

Its current book comprises 99% of established or commercial farmers, but the organisation said it wanted to move aggressively into New Era or emerging farmers with the same goals of impacting local economies.

Siphugu noted that with decades of experience, the Land Bank Insurance Company had tailor-made offerings for farmers.

He said with 27 financial centres and satellite offices around South Africa the Land Bank’s nationwide footprint and resources enable the provision of insurance services to the whole country.

“Insurance is often considered a grudge purchase until something happens. Emerging farmers must act responsibly and protect themselves against the multitude of risks that they face by getting the right insurance coverage,” he said.

The Land Bank Insurance Company’s asset insurance covers everything that has to do with farming requirements, such as vehicles, fencing, irrigation systems, machinery, livestock and computers. A farmer’s assets would be insured against fire, flooding, theft and natural disasters amongst other risks.

Crop insurance provides farmers with financial security and protection on their investments. The product covers them in case of crop failure due to excessive hail, frost, wind and physical damage to the whole or part of their insured crop, which would otherwise mean a loss of income.​​