FINAGRO–FIRA Peer Exchange: Lessons on Agricultural Risk Matrices and Insurance Policy

FINAGRO–FIRA Peer Exchange: Lessons on Agricultural Risk Matrices and Insurance Policy

15 May 2026 | Online

Introduction

The Agri-PDB Platform facilitated a peer-to-peer exchange between FINAGRO and FIRA to support technical learning on agricultural risk management, with a focus on FIRA’s Matrix of Minimum Agricultural Risks and its connection to agricultural insurance policy. The session brought together technical teams working on agricultural risk, climate risk, insurance, sustainability, international cooperation and financial instruments.

For FINAGRO, the exchange was particularly relevant as the institution advances the development of its own agricultural risk matrix. This tool is expected to serve not only as a reference for credit decisions, but also as a guide for incentives and other financial instruments, including agricultural insurance.

Why the Exchange Mattered

Agricultural finance is highly exposed to climate, production, market and territorial risks. For public development banks, managing these risks requires more than individual financial products. It requires institutional tools that can help identify risks, guide decision-making and connect credit with appropriate risk mitigation mechanisms.

FIRA’s experience offered practical lessons on how a risk matrix can support this process. Its Matrix of Minimum Agricultural Risks helps define the risks that should be covered when producers access credit operations supported by FIRA’s guarantee service. These risks are identified through technical analysis, taking into account their probability of occurrence, relevance by territory and crop, and potential level of impact.

The matrix therefore works as a common reference point for several actors:

• Financial intermediaries
• Insurers and insurance funds
• Public institutions
• Producers
• Technical teams involved in credit and risk management

FIRA’s Matrix of Minimum Agricultural Risks

FIRA’s matrix is part of a broader insurance policy linked to its credit and guarantee operations. The objective is not to limit producers to a fixed insurance package, but to establish a minimum floor of risks that should be covered in relevant credit operations.

This approach helps ensure that insurance is used as a meaningful risk mitigation tool, rather than as a formal requirement disconnected from the real risks faced by producers. At the same time, producers remain able to contract additional coverage according to their specific needs.

FIRA’s matrix has evolved progressively:

• 2011: The first version was developed in coordination with Agroasemex. It identified minimum risks by state and agricultural cycle.
• 2020: The matrix became more detailed, incorporating agricultural value chains, crops and specific risk packages.
• 2024: The current version expanded the agricultural matrix and incorporated, for the first time, livestock and fishery products.

This evolution shows the importance of treating risk matrices as dynamic tools. Agricultural production conditions change, new threats emerge, and insurance markets evolve. A useful matrix must therefore be regularly updated.

A Multidisciplinary Working Group

One of the main lessons from FIRA’s experience is the value of a multidisciplinary working group. Since 2018, FIRA has coordinated a group involving public entities, insurance sector associations, insurance funds, banks and non-bank financial intermediaries.

The group has four main functions:

• Improve and update the Matrix of Minimum Agricultural Risks
• Develop mechanisms to centralize and report relevant statistical information
• Promote better practices in agricultural insurance operations
• Increase transparency and access to information for producers and sector actors

The visual shared during the exchange on page 3 of the document shows the range of institutions involved in this process, including FIRA, public-sector actors, insurance organizations and financial-sector representatives. This broad participation helps ensure that the matrix reflects different perspectives, including those of insurers, users, intermediaries and public policy actors.

How the Matrix Is Updated

The update process is designed as a participatory and technical exercise. It begins with internal consultations across FIRA’s regional offices. These offices help identify changes in risk profiles, emerging threats, new productive chains or coverage needs that are not yet reflected in the matrix.

FIRA then prepares a technical proposal, which is submitted to the working group for review, validation or correction. The process culminates in a detailed review meeting where proposed changes are assessed against technical criteria, industry needs and the availability of insurance products in the market.

The diagram on page 5 of the document summarizes this workflow: regional consultations, technical preparation by FIRA, review by the working group, incorporation of approved changes and public dissemination of the updated matrix.

Once updated, the matrix is made available through a public microsite. This promotes transparency and allows producers, insurers, financial intermediaries and other stakeholders to access relevant information.

Insurance Policy and Credit Operations

FIRA’s insurance policy is closely linked to its guarantee service. When financial intermediaries use this service, they must comply with specific insurance requirements within the credit process.

This means that insurance is not treated as an isolated product. It becomes part of the credit structure and supports the protection of:

• The producer
• The financial intermediary
• The credit operation
• The guarantee mechanism

Financial intermediaries must include the required insurance documentation in the credit file. FIRA can then verify, through supervision processes, whether the insurance policies are aligned with the minimum risks defined in the matrix.

Q&A Session: Key Points Discussed

The Q&A session helped clarify several operational and policy issues.

First, participants asked whether insurance products are available for all risks included in the matrix. FIRA explained that the matrix is designed to reflect risks for which insurance coverage is available in the market, particularly among the actors participating in the working group.

Second, the discussion explored whether the matrix can help identify gaps in the insurance market. FIRA confirmed that when new production chains or uncovered risks are identified, these can be brought to the working group. If no suitable product exists, insurers or insurance funds may consider developing new solutions.

Third, participants discussed the role of financial intermediaries. In operations using FIRA’s guarantee service, intermediaries are expected to observe the matrix and ensure that insurance is integrated into the credit process.

The session also addressed several challenges:

• Producer organizations are not yet formally included in the update process, although regional offices collect feedback from territorial actors.
• Some challenges have a regulatory dimension, especially those related to guarantees, commissions, provisions and insurance operations.
• Compliance is verified mainly through ex post supervision and sample-based review, rather than transaction-by-transaction pre-validation.
• There is currently no differentiated interest rate or credit condition based on whether an operation has insurance.

Key Takeaways

The exchange showed that risk matrices can play an important role in strengthening agricultural finance. When linked to credit, guarantees and insurance, they can help institutions move toward more transparent, risk-informed and resilient financing models.

FIRA’s experience also underlined that the effectiveness of such tools depends on collaboration. A matrix is strongest when it is built and updated through technical dialogue among public institutions, financial intermediaries, insurers and territorial actors.

For FINAGRO and other public development banks, the session provided practical insights on how to design, update and operationalize risk matrices in ways that support better decision-making, improve the use of insurance and strengthen resilience across agricultural value chains.