About 28 million rai of rice farmland operated by 1.91 million farmers is insured for the 2018 crop year, the chief of the Bank for Agriculture and Agricultural Cooperatives (BAAC) has said. The area under coverage represents nearly half of total rice acreage in Thailand.
The Cabinet approved in April an insured area of 29 million rai for the rice insurance scheme for the 2018 season worth THB1.84bn ($55m). The scheme, run by the BAAC, covers six natural disasters: floods, drought, storms, cold, hail and fires.
Under the scheme, farmers receive compensation of THB1,260 per rai for crops damaged by natural disasters. They can further secure THB630 per rai for damage caused by pests and diseases. The scheme charges an insurance premium of THB90 per rai, of which THB54 is shouldered by the government, while the BAAC pays the remainder only for the bank's customers. Non-BAAC customers must cover the rest if they have taken out rice insurance, according to a report in The Bangkok Post.
In the 2017 harvest season, 1.75 million rice growers with 26.1 million rai of farmland were insured with a combined insured sum of THB2.53bn. The insured areas of farmland represented 87% of the 30m rai target and about 45% of the country's total rice fields.
Some 196,300 rice farmers with 1.64m rai of insured rice fields, representing 6% of the insured areas of farmland, received insurance claims worth THB2.07bn for the last crop season.
Even though the rice insurance compensation has increased this year and the government is contributing another THB1,111 per rai to farmland in areas that have been declared disaster zones, the combined compensation is still far lower than the average production cost of THB4,000 per rai.
Crop insurance in Thailand is limited to rice only, but BAAC recently said that it planned to introduce the country's first dairy cattle insurance scheme in August, in a push to extend coverage to other farm products and alleviate the government's burden in paying out compensation.