Nepal: Yield-based insurance introduced for spring padi
Source: Asia Insurance Review | Mar 2017
Spring padi growers can now insure their crop with the introduction of a new yield-based insurance policy by the Insurance Board (IB).
This is the second yield-based agriculture insurance product in the country, after seed crop scheme, reported Kathmandu Post.
IB Deputy Director Kundan Aryal said: “Insurance companies will issue this policy to a group of cultivators based on information made available by district agricultural development offices.” Subscribers pay a premium equivalent to 5% of the coverage amount.
The policy covers the deficit in the projected yield. It also covers losses triggered by fire, lightning, earthquake, floods, drought, landslide, cyclone, hailstorm, snow, sleet, other disasters, pests and diseases. Policyholders are entitled to compensation of up to 90% of the coverage amount.
In comparison, most of the other crop-related insurance products in the country cover risks based on input cost. Such cost includes money spent on labour, transportation, irrigation, depreciation, repairs, and farm management; and expenditure on fertilisers, pesticides and seedlings. Input-cost based policies only cover losses incurred by growers till the time the crops are ready for harvest.
Spring padi is less commonly cultivated because of higher irrigation needs. It is planted on only 112,000 hectares. Currently, around 1.42 million hectares of land in the country are suitable for growing padi.