Govt plans to pilot crop and livestock insurance scheme

Thupten Sangpo

The Thai government will first pilot a crop and livestock insurance program before rolling it out nationwide, Thinley Namgyel, secretary general of the Ministry of Agriculture and Livestock, said at a press conference on June 28.

He acknowledged the importance of the scheme and said discussions were underway on farmers’ affordability and potential government subsidies.

Tinli Namgyel said the pilot phase will target specific crops (rice, corn, potatoes and oranges) and livestock (cattle, pigs and poultry).

He added that insurance would take into account not only climate-related losses but also losses caused by pests and diseases, etc.

“Preliminary discussions with two insurance companies, Bhutan Insurance Company Limited and Royal Bhutan Insurance Company Limited, indicate that the premium for crops will be 5.8%, while the premium for livestock will vary,” said Thinley Namgyel. “The premium for cattle will be 15% in the first year and will be reduced to 10% thereafter. The premium for pigs and poultry will be 10%.”

He said that assumes not all farmers will participate. “Even if the participation rate reaches 50%, the annual premium will reach 2.8 billion Ngultrum if borne only by farmers.”

He said the government was exploring cost-sharing models, including 50-50 sharing with farmers. “In this case, the government would have to bear Ngultrum 1.4 billion per year.”

Prime Minister Tshering Tobgay said if the government paid 100% of the premiums, 2.8 billion nunatrum was a significant sum considering the country’s current revenue. “Proper research and pilot projects are essential to ensure that the program benefits all stakeholders.”

He said most of the crop losses and damages were borne mainly by low-income farmers who may find it difficult to afford the premiums and the government would look at how to include them in the scheme.

Recently, Congress passed a bill to establish a crop and livestock compensation trust fund.

During the parliamentary session, Agriculture Minister Yongtan Phucuo said the government had prepared an insurance plan to submit to parliament and allocated a large amount of funds to the agriculture and livestock sectors during the 13th Five-Year Plan.

He expressed concern about the budgetary impact, noting that the proposed costs were beyond current appropriations.

Parliament directed the Ministry of Agriculture and Livestock to submit an implementation report in the next parliamentary session.