Royal Insurance Corporation of Bhutan Limited (RICBL) is “ready” to provide crop and livestock insurance to farmers, according to the company’s chief executive officer Karma.
The Ministry of Finance (MoF) rejected the joint recommendation from the Ministry of Agriculture and Forests (MoAF) and RICBL on crop and livestock insurance schemes owing to the pandemic.
Lyonpo Yeshey Penjor said during a press meet in December of last year that although farmers were encouraged to insure their crops and livestock, many were reluctant.
None of the farmers has insured their crop or livestock with RICBL up to this point.
CEO Karma said that the insurance company was ready to provide crop and livestock insurance, provided that the premium is good enough to sustain the scheme.
For the success of the scheme, he said, there is a need for support from farmers and the government.
Government support is required to provide agricultural or livestock services to farmers, and agriculture specialists to estimate the yield from the total paddy cultivated area.
For example, if farmers say that their three-acre land will yield Nu 2 million worth of potatoes, experts from the MoAF are required to verify the estimated yield.
RICBL has decided, in consultation with the government, to insure crops that are harvested by a majority of farmers, and cash crops such as ginger, cardamom, apples, oranges, and potatoes.
This insurance scheme is yield-based, unlike the input-based scheme in 2015.
“The premium will be expensive for farmers without support from the government,” Karma said.
The insurance scheme cover risks of drought, pest, wild animals, and flood.
RICBL will start the premium at 8 percent and assess accordingly. The discussion to determine the minimum insurable unit for the scheme is underway.
The MoAF and RICBL worked out a crop insurance scheme and submitted it to the Office of the Gyalpoi Zimpon for further guidance.