Crop insurance growth has remained slow despite the government offering 75 percent subsidy on premium.

The slow growth has been attributed to the lack of technical manpower and poor distribution channels .

Shreeman Karki, director at the Insurance Board (IB), said livestock insurance accounted for 85 percent of farm insurance this year. “However, the rate is very low as far as crop insurance is concerned,” said Karki at a meeting of the Parliamentary Agriculture and Water Resources Committee on Sunday.

He said the lack of technical manpower to calculate premium and losses and low number of insurance agents in rural areas resulted in slow growth in crop insurance. A total of 700 insurance agents and 100-150 para-veterinarians have been mobilised for agriculture insurance, according to Karki.

Two years ago, the government had increased the subsidy on crop insurance premium to 75 percent from 50 percent.

The people started taking the scheme seriously only after the subsidy was raised, according to Uttam Kumar Bhattarai, secretary at the Ministry of Agriculture Development. “Losses the farmers faced due to the April 25 earthquake further prompted them to go for the insurance scheme,” he said. “And, the trend has been on the rise.”

The government has allocated Rs120 million for the farm insurance subsidy. As of now, the policies worth Rs1.51 billion have been issued. Premiums worth Rs72.6 million have so far been collected, while the insurers have settled claims of Rs21.6 million.

Government officials and lawmakers stressed on the need for introducing integrated programmes along with a pricing mechanism for agricultural products, irrigation facilities and other logistics supplies for effective implementation of farm insurance. According to them, the government has failed to deliver the service despite growing awareness.

Shyam Prasad Poudel, secretary at the Ministry of Livestock Development, said low presence of insurers in rural areas impeded the government’s target to boost agro insurance. “The demand for insurance for dairy products, quadrupeds and poultry farming has grown of late,” said Poudel. “However, farmers have not been able to avail the service as insurers are focusing  more on urban and sub-urban areas.”

Poudel stressed on the need for allowing microfinance institutions and cooperatives to carry out the insurance business in order to promote agro insurance. These financial institutions are permitted to work as insurance agents.

Karki of the Insurance Board said they have forwarded a bill on amendments to the laws concerned to the Finance Ministry.

Surya Prasad Acharya, joint-secretary at the Finance Ministry, said his ministry is considering allowing microfinance and cooperatives to work as insurers.