Bangladesh Bank governor Dr. Atiur Rahman Monday said 'crop insurance' will be launched very soon.
"We are in discussions with insurance companies along with insurance regulator to start crop insurance for the farmers," he said while speaking at inaugural session of 19th General Assembly of Asia-Pacific Rural and Agricultural Credit Association (APRACA) in a city hotel.
The 64th EXCOM Meeting and 19th General Assembly of Asia-Pacific Rural and Agricultural Credit Association (APRACA) along with regional forum on "Risk Management for Smallholder Farmers and Communities" started in the capital Dhaka on Sunday.
Meanwhile, Deputy Governor SK Sur Chowdhury was elected the chairman of APRACA for two years. He replaced Mr. Kim Vada.
At least 110 delegates from APRACA member countries are attending in the two-day long programmes. This year Bangladesh Bank (BB), the country's central bank, is going to be chairman of the international organization, officials said.
APRACA Chairman Kim Vada delivered address of welcome, General Secretay Won-Sik Noh gave vote of thanks and Deputy Governor of BB Shitangshu Kumar Sur Chowdhury also spoke.
BB Governor said financing of agricultural and other rural farm and off farm economic activities is crucially important for food security, livelihood security and poverty eradication in large swathes of population in our region and elsewhere
"As a founder member of the APRACA Bangladesh Bank (BB) has remains proactively engaged in addressing the challenges in maintaining adequate financing flows to these sectors of the real economy," he said.
He said substantial expansion of Asia Pacific region's share in global agricultural output and trade indicates substantial success of APRACA's in its well over four decades of existence; but much also remains to be attained in drawing agricultural and rural financing fully into the mainstream activities of financial institutions and markets in our region.
Dr. Atiur said disruptive events like the last global financial crisis bring up new challenges to contend with, like credit crunch or financial exclusion for farm and non-farm small businesses.
Narrating the BB's initiatives to face the challenges he said Bangladesh Bank has taken many steps including credit facility to rural area, Tk 10- account for the farmers and loan service for the share crop farmars.
He said civil society awareness on these issues have heightened significantly over the recent past decades; and a number of global initiatives have emerged to promote socially and environmentally responsible ethos in financial and non financial business, inter alia including the AFI and the UN Global Compact.
"Our ongoing campaign of mainstreaming socially responsible financing has succeeded in enthusing all our banks into engagement in agricultural and MSME financing; they are now spontaneous in innovating and launching cost efficient off branch service delivery modes reaching out to small farm and non-farm MSMEs in remote rural areas," he said.
He said some difficulties impeding spontaneity of banks in agricultural financing remain still largely unresolved however, like absence of crop insurance schemes to protect growers from output risks in adverse climatic conditions, and from price collapse risk in events of bumper output. Farmers' cooperatives for collective warehousing and marketing of agricultural output to secure better prices have not flourished in Bangladesh.
BB Deputy Governor SK Sur Chowdhury, who is also vice-chairman of APRACA, said Bangladesh has over years developed a social consensus for inclusive socioeconomic growth equitably opening up advancement opportunities for all population segments.
He said the entire Bangladesh banking sector has been induced to engage enthusiastically in inclusive financing initiatives, on the one hand by invoking their corporate social responsibility, and on the other hand by steering facilitation and adoption of cost saving modes of off-branch delivery and management of numerous loans to SMEs in dispersed locations.
"Liquidity support refinance to lenders, mainly funded by development partners, against their loans to the inclusive financing target sectors including agriculture, SNEE and 'green' initiatives has also been arranged," he said.
Mr chowdhury said despite commendable success in increasing outreach and impact of rural finance delivery, our rural poor are still facing many risks and challenges due to the rising prices of food and fuel, adverse effects of global financial crisis, rapid shrinkage of agricultural land, inadequacy of appropriate technology, underdeveloped marketing system, absence of farmers' organization, increased incidence and intensity of natural disasters resulting from climate change, etc.
"In fact, these risks and challenges are somewhat common in most of the rural finance system in the APRACA member countries, and we have not yet been able to deal with these problems," he added.
APRACA promotes cooperation and facilitates mutual exchange of information and expertise in the field of rural finance among its members.
A total of 68 rural finance and agricultural credit institutions in 21 countries of Asia-Pacific region are the members of the organisation.