Agri-insurance needs government support to flourish, said insurance specialists yesterday.
Around the world agri-insurance was introduced on public-private partnership, where the government plays a vital role, said Vijaysekar Kalavakonda, global insurance specialist of the World Bank Group.
In Bangladesh, Green Delta has introduced the product with support from the International Finance Corporation. But the product is not commercially profitable yet. To promote the product all over the country, the government should provide subsidy so that farmers become inspired to pay the premium, he said.
“If the product works, then people will not go to the government but to the insurer in case of natural calamities. Farmers too will not be impacted.”
Kalavakonda's comments came at the launch of Green Delta Insurance's weather index-based agri-insurance, which it has been piloting for the past three years in eight districts. Green Delta reached 10,000 farmers with the project. “This is an important initiative for the protection of farmers,” said Finance Minister AMA Muhith.
Agriculture depends on nature in most cases and farmers plunge into huge losses when natural calamity strikes.
“If agri-insurance works successfully it would be a great thing for our agricultural economy and the insurance sector also,” he added.
Bangladesh is one of the most climate vulnerable countries, said Md Ashadul Islam, secretary to the bank and financial institutions division.
The climate-related funds from global donors should go straight to agri-insurance instead of the government as natural calamities are borne from climate change mostly.
“Agri-insurance will protect our farmers and certainly improve our food security in the long run as well,” he added.
Md Shafiqur Rahman Patwari, chairman of the Insurance Development & Regulatory Authority, also emphasised on the need for government support to promote agri-insurance.
Wendy Werner, country manager of IFC for Bangladesh, Bhutan and Nepal; Nasir A Chowdhury, founding managing director of Green Delta Insurance; and Farzana Chowdhury, managing director of the company, were also present.