Insurance coverage of farm sectors surge 58 percentThe government currently offers subsidy equivalent to 75 percent of the premium amount.
According to the Insurance Board, Nepali insurance companies sold insurance policies worth Rs18.72 billion in agricultural products in 2018-19, compared to the insurance policies of Rs11.85 billion in the fiscal year 2017-18. The board’s record shows that the insured amount increased fourfold in the past five years.
Last year, non-life insurance companies collected Rs631.44 million in premiums, up from Rs510.93 million in the previous year. Over the period, the insurers issued 101,152 policies, 73 percent more compared to the previous year.
“The insurance coverage of the farm sectors has increased by a notable amount as the government has been providing a subsidy on the premium to encourage farmers to insure their farm products. Farmers are now more aware of the benefits of farm insurance,” said Chiranjibi Chapagain, chairman of the board.
The government through the budget for 2014-15 had announced providing 75 percent subsidy in the premium of agriculture insurance to farmers. However, only a handful had been receiving benefits due to a lack of awareness about the insurance policies among the small farmers, mainly from remote areas.
According to the board, the government provided premium subsidies totalling Rs631.44 million to farmers in the fiscal year 2018-19. The subsidy was 65 percent more than the amount in the previous year.
Citing the low coverage, the board made it mandatory for non-life insurers to provide agriculture insurance services, assigning them certain districts to carry out the business. “This policy has made insurers expand their outlets in the concerned districts and to promote insurance literacy to the farmers there to sell their policies,” he said.
The board has enforced over two dozens of distinct insurance policies to cover major livestock and crops produced in the country such as ginger, coffee, paddy, mushroom, potato, sugarcane, seed, vegetable, turmeric, cardamom, banana, cattle, fish, poultry and goat.
Farmers can claim insurance if their crop or livestock is damaged from fire, lightning, earthquake, flood, inundation, drought, landslide, tornado, hailstorm and snowfall. They can also claim insurance for losses due to pest and disease.
The board’s record shows that the share of crop insurance is still negligible compared to insuring livestock. In the last fiscal year, farmers purchased policies in crop insurance amounting to Rs834.58 million, which stood at only 4.7 percent of the total insured amount in farm products. In the crop insurance, farmers purchased policies worth Rs547.39 million to cover risks in fruit production.