Peru: Catastrophic Agricultural Insurance (SAC) for Protecting Agricultural Producers Against Climate and Natural Risks

The Catastrophic Agricultural Insurance Program (SAC) is a public agricultural insurance mechanism implemented in Peru since the 2009-2010 agricultural season by the Ministry of Agrarian Development and Irrigation (MIDAGRI), through the Agricultural Guarantee and Insurance Fund (FOGASA). Its objective is to reduce the economic vulnerability of low-income agricultural producers, particularly family farmers, to losses caused by adverse climate events and other insured risks. The mechanism provides public financing for insurance premiums and contracts insurance companies to provide coverage and compensate eligible losses in accordance with the conditions established for each agricultural season. Covered risks may include droughts, frosts, floods, excessive rainfall, hailstorms, strong winds, landslides, pests and diseases, subject to the applicable insurance policies. Implementation involves MIDAGRI, FOGASA, regional governments and insurance companies. Regional agricultural authorities participate in managing and reporting agricultural losses. SAC seeks to provide basic financial protection against agricultural losses, reduce the economic exposure of farming households and support the continuity of agricultural production. Geographic coverage, insured crops, claim-triggering conditions and compensation arrangements are established through the operational instruments applicable to each agricultural season. The program is not a credit facility or a technical assistance scheme and should not be confused with the ministerial resolutions approving specific insurance conditions for individual agricultural seasons.