A recent news report highlighting the plight of Towhidul Islam, a marginal farmer in the Godagari municipal area of Rajshahi, serves as a stark reminder of the vulnerability of farmers in Bangladesh due to unpredictable weather patterns. Because of a heavy rainfall during Aman harvesting period in 2023, Towhidul lost almost his entire Aman crop and the Tk. 2 lakh he had invested in cultivating his 15 bighas of land. This example alone underscores the urgent need for effective agricultural risk mitigation measures, particularly in a country where agriculture plays a significant role in the economy, contributing over 11.3 per cent to the GDP and involving more than 37 per cent of the population.
Agriculture sector has long been vulnerable to natural disasters like flooding, cyclones, and droughts, which disrupt farming activities and may cause substantial crop and economic losses. Climate change has aggravated the situation further.
To address these issues, weather index-based crop insurance can be a potential solution, offering a mechanism to mitigate weather-related uncertainties by providing timely compensation based on objective weather data. About five years back, such a scheme was piloted by the state-owned Sadharan Bima Corporation (SBC) and the Asian Development Bank (ADB). It received overwhelming response from farmers in three districts where the project was implemented, Rajshahi, Sirajganj and Noakhali. Its aim was to provide financial compensation to farmers against their losses caused by adverse weather conditions, thereby promoting sustainable growth in agriculture, reducing poverty, and maintaining macro-financial stability.
Despite the potential benefits, one of the major hurdles in the implementation of such insurance schemes, however, has been the lack of government subsidies and support. The Ministry of Agriculture has shown reluctance towards endorsing weather index-based crop insurance, citing reasons such as concerns over undue claim settlements and existing subsidies on agriculture. While subsidies are essential for promoting private-sector agricultural insurance and ensuring affordability for farmers, it should not be viewed as a hindrance, but rather as an investment in mitigating production risks and safeguarding the livelihoods of millions of farmers.
The case of Towhidul Islam highlights the devastating consequences of not having adequate risk mitigation measures in place. His struggle to recover from crop losses and the burden of having to repay loans taken from local micro-financiers paint a grim picture of the challenges faced by farmers. It is imperative that the government, policymakers, and relevant stakeholders prioritise the establishment of effective crop insurance mechanisms that are accessible, transparent, and sustainable.
The experience of other countries, such as India with its Pradhan Mantri Fasal Bima Yojana (PMFBY), demonstrates the potential benefits of well-designed and subsidised crop insurance schemes in providing financial security and peace of mind to farmers. PMFBY focuses on making premium costs accessible to farmers through government subsidies, leveraging existing infrastructure, promoting investments by insurance companies, and ensuring efficient application processing through technology adoption.
Bangladesh can learn from India's tried and proven effective experience and tailor its approach to suit its unique agricultural landscape and challenges.
Furthermore, efforts should be made to address past shortcomings and improve the effectiveness of insurance products. This includes enhancing flood management strategies, innovating adaptation tools, and ensuring the transparency and efficiency of claim settlement processes. By addressing these issues and investing in resilient agricultural practices, Bangladesh can better prepare its farmers to withstand the growing threats posed by climate variability and extreme weather events.
The story of Towhidul Islam - and there are many more like his - serves as a poignant reminder of the urgent need for comprehensive and sustainable agricultural risk management strategies in Bangladesh. A well-designed insurance programme can offer much-needed security to farmers against the adverse impacts of natural calamities, fostering long-term agricultural sustainability and economic development.
Overall, a successful implementation of crop insurance in Bangladesh requires concerted efforts from policymakers, insurers, and international partners to overcome challenges and ensure the resilience and prosperity of the agricultural sector and rural communities. It is time for taking decisive action against the unpredictable forces of nature and protect the unsung heroes of the economy - the farmers.
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