Sri Lanka's state-run reinsurer, the National Insurance Trust Fund (NITF), will prepare a plan to insure key agricultural crops for up to LKR40,000 (US$261) an acre against natural disasters.
Paddy, maize, soya, large onions, potato and chillies will be covered under the scheme, according to a government announcement.
The move follows approval from the Cabinet of the the proposal tabled by Agriculture Minister Duminda Dissanayake. This development takes place against the backdrop of an ongoing drought that has affected 1.9 million people.
The NITF already provides cover for natural disasters, with most of the risks re-insured abroad.