Farmers from now on will be able to get their crops,
livestock and poultry insured by insurance companies. The Insurance Board (IB)
has made agro insurance mandatory for non-life insurance companies by January
14. Non-life insurance companies will from now on have to insure paddy,
vegetables, fruits and potato crops, livestock and poultry under the heading.
Ministry of Agriculture Development will provide 50 per cent
subsidy for the insurance once the full budget is announced. "Introducing agro
insurance is a huge step forward towards promoting commercial agriculture," said
chairman of IB Prof Dr Fatta Bahadur KC.
According to the directive, insurance companies have to
insure commercial and personal crops, livestock and poultry breeding. The
regulator has also determined five per cent insurance premium of the sum assured.
Insurance Board has determined the amount of insurance policy ranging from Rs
10,000 to Rs 150,000 for cattle based on their breed and age.
Crop insurance will cover any loss arising from natural
calamities such as landslides, earthquakes, or any damage arising from pests
from the time of plantation till harvest. "This is a great opportunity for
non-life insurance companies to expand their penetration and business across
Nepal," added Dr KC.
"We have conducted in-depth studies and found that lack of
insurance has affected the progress of the sector," pointed out agriculture
secretary Jaya Mukunda Khanal. He also informed that the agriculture ministry
will expand its service centres across the nation and Agriculture Development
Office will work as a bridge between insurance companies and farmers.
"Despite Nepal being an agriculture based country, and
agriculture contributing 36 per cent to GDP, investment in the sector is low,"
pointed out joint secretary of the Ministry of Finance Baikuntha Aryal. In the
absence of insurance, investment in agriculture in highly risky, he added,
citing an example that if a cattle dies, a farmer is further pushed into debt
and poverty since there is no agency to cover the loss.