Kathmandu: The government will provide 50 percent subsidy to farmers when insuring agriculture and livestock from 16 July onwards. In the budget speech for the current fiscal year 2078/79, the subsidy was reduced to 25 percent from 75 percent.
Although the regulatory authority of insurance sector, Beema Samiti, had suggested to the GoN to continue the subsidy but finance ministry has now given approval for 50 percent subsidy only. This rule is applicable only from the 16 July 2021.
If a farmer wants to insure his paddy worth Rs.100,000, he/she has to pay an insurance fee of Rs. 5,000. Most companies charge a premium of 5 percent of the sum assured when insuring livestock and agriculture. Thus, if you have to insure a buffalo worth one lakh rupees, you have to pay an insurance fee of five thousand rupees annually.
Last year, the government of Nepal used to provide 75 percent of the Rs 5,000 grant, or Rs 3,750. So, the farmers had to pay only Rs. 1250. Some companies have been charging an additional Rs.100 as accident insurance. When buying a policy, you have to pay Rs.1370 as you have to buy a ticket of Rs.20.
If only 50 percent subsidy is given from this year, the government will pay only Rs. 2500 against the insurance of sum assured Rs.100,000. So,after the addition of additonal Rs. 100 for accidental insurance and Rs. 20 for postal ticket, the farmers have to pay Rs. 2670 in total.