Sadharan Bima Corporation (SBC), a state-owned non-life insurance company, is willing to introduce weather index-based crop insurance as a regular scheme as the authorities consider it would help ensure food security and reduce poverty to a large extent.
The government and farmers are also interested in the specialised insurance product in greater interest of the farmers who often face uncertainties due to natural disasters like floods and droughts.
The interests, evinced after a three-year pilot project, were communicated at a training programme in Dhaka on Wednesday, organised by the Weather Index-based Crop Insurance Project (WIBCI).
The Asian Development Bank (ADB)-funded project started in May 2015 in three districts of Rajshahi, Sirajganj and Noakhali and is scheduled to come to an end on June 30, people familiar with the project said.
"The SBC and the government may take a final decision, but so far the SBC is positive to make it a regular scheme for the farmers," Wasiful Haque, project Director at the WIBCI, told the programme.
"The farmers at the field level have shown growing interest in the insurance product," he said.
The WIBCI is fully dependent on the weather office data pertaining to the movement of the temperature and rainfall. The project has its own weather stations at the districts to prepare such data through an arrangement with the Met Office.
The insurance product is designed to protect the farmers from crop losses due to natural disasters such as high temperature, drought and floods.
When contacted, SBC managing director Syed Shahriyar Ahsan said the crop insurance should be expanded thorough banks and non-government organisations working with the farmers and providing crop loans across the country. "Yes, we are positively thinking about making it a regular scheme."
Mr Ahsan said the SBC learned much about the product and it could successfully offer products regularly for the farmers.
He pointed out that the farmers had to face immense troubles in getting due funding after the flash floods in greater Sylhet last year, and said: "A section of traders cashed in on the shortfall of the staple by raising prices of the rice."
He, however, said there is a need for government supports in terms of subsidy as they found that there is a gap between claim settlements and premium earnings.
For instance, he said, neighbouring India provides around 80 per cent subsidy for the insurance. All leading non-life insurance companies in India have the similar schemes and their yearly turnover in terms of premium earnings would be around US$4.50 billion.
Speaking at the programme, Anuj Kumbhat, a consultant of the project, said Indian insurance companies considered the crop insurance commercially viable and, on the other hand, it has societal impacts from farmers' point of view.
He said the crop insurance programme has been expanding fast in India and the government is also providing financial supports to this end.
Many at the SBC said that if the government provides subsidy for the crop insurance, it will directly go to the farmers' pockets.
However, the WIBCI has fetched over Tk 3.2 million against 6,828 bighas of land insured with the crop insurance in the three districts. But it paid out over Tk 5.3 million as claims to the farmers due to crop losses.
But it got Tk 2.2 million from re-insurances and for that purposes the WIBCI had to pay premiums.
© 2024 - All Rights with The Financial Express
