Bangladesh: Government urged to promote farm insurance
Source: Asia Insurance Review | Jun 2018
The Asian Development Bank has called on the government to scale up sustainable agriculture insurance in Bangladesh.
“The agriculture insurance market is underdeveloped and the government should enact a policy to help the sector to mature,” said ADB country director Manmohan Parkash.
He made a set of recommendations based on the experience of a pilot project, ‘Weather Index-based Crop Insurance, funded mostly by the ADB and run by state-owned Sadharan Bima Corporation, reported The Daily Star.
For instance, he advised financial institutions to introduce agriculture insurance tagged with farm credit to encourage farmers to take insurance coverage. He also stressed the adoption of technology for agriculture insurance to get early warnings, which will enable farmers to avoid weather risks.
The pilot crop insurance scheme allows a farmer to claim compensation from the insurer when certain climatic trigger points are reached, such as cyclone or tropical storm in a given area hits a specified magnitude or when rainfall rises above or drops a certain level.
A total of 12,000 small farmers were inducted against a target of 6,000 for the pilot which began in March 2014 and will end on 30 June 2018.
Sadharan Bima collected a total of BDT5.1m ($60,600) in premiums, of the ADB and the government provided a subsidy of BDT2.2m. So far, insurance claims amounting to BDT5.4m have been paid under the project. A