The increasing frequency and severity of hailstorms mean it is now a significant threat to farmers in South Africa, as well as business and food systems.
Direct losses usually translate to reduced corps and infrastructure damage, with collateral damages counted in irrigation systems, vehicles and even bruised fruit with lower value as well, according to an article on news platform Insurance Biz.
The article also noted that without insurance, commercial and smallholder farmers risk falling into poverty that can be difficult to escape.
In this scenario, “crop insurance provides a critical safety net”, the article stated.
“It provides financial protection that helps farmers recover without entering unsustainable debt cycles, while also improving access to credit, as insured farmers are viewed as lower risk by lenders,” said the article.
“With this support, they are more able to invest in improved technologies and climate-resilient practices. At its core, crop insurance transfers the risk of extreme weather from the individual farmer to a broader risk pool, enabling long-term sector stability.”