Govt insurance subsidy scheme attracting more farmers

Government´s subsidy scheme for livestock and crop insurance has become popular among farmers.

Following increment in the subsidy in insurance premium for livestock and crops from 50 percent to 75 percent this year, more farmers have started joined the insurance scheme and applied for subsidy, according to the Ministry of Agricultural Development. The govenrment had introduced 50 percent subsidy in insurance premium for livestock and crops last fiscal year 2012/13 and increased it to 75 percent this year. 

Figures of the first three months [mid-July to mid-October] of the current fiscal year compiled by the ministry show that farmers have insured their livestock worth Rs 295.76 million (94 percent) while the total insured sum stands at 312.44 million. 

Sunil Kumar Singh, section officer at MoAD, said that the farmers are more attracted to livestock insurance due to higher risks involved compared to crops. 

Singh said, “The insured livestock includes mostly of cows. Also, the insurance policy is very cheap and subsidy is huge, so more farmers have insured their cattle.”

Farmers can insure their cow worth Rs 100,000 by just paying Rs 1250 per year and they get another 15 percent discount in insurance premium if the insurance policy is bought through cooperatives.

The government has already paid Rs 16.2 million for to finance the subsidy in the first three months. The government has earmarked Rs 60 million for the purpose.

During the last fiscal year when the subsidy for farmers was just 50 percent, and the farmers´ response was poor as the govenrment paid just Rs 6.2 million in subsidy although the amount earmarked for the year was Rs 130 million. 

From this year, the government also lifted cap of Rs 10 million maximum in the insured crops and livestock making the scheme open even for large scale investments.

Farmers can insure their crops and livestock in the local non-life insurance company at subsidized rate and the government reimburses the fund to the insurance companies. 

Binod Kaji Sherstha, deputy general manager of Lumbini General Insurance Company, said that farmers are getting encouraged after the subsidy amount was increased to 75 percent. “Mostly firms and group- managed enterprises rearing cattle have insured their cattle in our company,” said Shrestha. A total of 17 non-life insurance firms have offered crops and livestock insurance across the country.

Source: Republica