Kathmandu. Nepal has been importing food and agricultural products worth billions of rupees annually. Amid the government’s claim of becoming self-reliant in agriculture, the alarming decline in both the number of crop insurance policies and actuaries has exposed a huge gap between the state’s policy and the ground reality.
According to the analysis of statistics of the Nepal Insurance Authority (NEA) for the last 3 fiscal years, the crop insurance sector is almost on the verge of coma, while the livestock insurance sector is maintaining the credibility of agricultural insurance.
80% fall in crop insurance{
}
According to the data of the NRA, the fiscal year 2079. The number of crop insurance policies in 2018 was 8,178. June FY 2080. It rose marginally to 9,730 in 81. However, the fiscal year 2081. The number has dropped by 82.75 percent to just 1,678.
Not only the number, but also the total sum insured of the crop in the financial year 2080. From Rs 659.16 crore in FY81 to Rs 659.16 crore in FY 2081. It was limited to Rs 192.85 crore in ’82.
While the picture of crop insurance is disappointing, the attraction of farmers towards livestock (livestock and birds) insurance seems to have remained stable or slightly increased. FY 2080. The number of livestock insurance policies fell to 146,391 in the fiscal year 2081. It increased by 9.5 percent to 160,332. This shows that farmers are more aware and confident about the safety of livestock than in crops.
Why did crop insurance decline?
The main reasons behind this big drop in crop insurance are the tightening of subsidies by the government, the exploitation of state funds in the past, and technical complexities.
In the past years, there have been huge irregularities in the name of agricultural insurance. There was a trend of farmers who had access to money and paper farmers who would take 80 per cent of the state’s subsidy by not cultivating or making normal farming big, and then taking millions of rupees from insurance companies by making false claims.
Lately, the Nepal Beema Authority (NEA) and the Ministry of Agriculture have started demanding on-site inspections, the area of the real land and mandatory documentary proofs (such as land ownership certificates or actual lease agreement). Compliance with the new rules has largely discouraged fraud on state treasury funds. The direct impact of which has been seen in the decline in statistics.
TAG_OPEN_strong_39 Indifference of insurance companies to withholding grants
}
Another crisis arose as the government did not pay the subsidy amount to the insurance companies for a long time. After the government stopped subsidies, insurance companies stopped issuing policies for agriculture and crop insurance or started confusing the farmers.
Statistics also prove this. Fiscal Year 2079. In the fiscal year 2081, the government provided a subsidy of Rs 165.87 crore for agricultural insurance. In 2018, it came down to Rs 133.844 crore. The crop insurance network has shrunk as the government itself cuts the budget and does not pay it on time.
Cumbersome process of claim payment{
}
The main reason why genuine farmers are deprived of crop insurance is that the damage assessment system is impractical. In livestock insurance, proof of the animal’s death (tag or photo) is easily available and it is easy to get the claim payment. However, there is no mechanism at the local level to make a technical assessment of the damage caused by drought, flood and pest in crop insurance.
Even if the agricultural technicians do not report on time, the farmers do not get compensation. Even after paying the premium, the real farmers have stopped taking crop insurance as they are not able to get the claim when they are in trouble.
The fall in crop insurance policies to 1600 has dealt a major blow to Nepal’s food security and agricultural commercialization. On the one hand, the new rules have put a stop to gangs that looted the state treasury in the past. However, the real farmers are at the mercy of it.
If the country is to avoid becoming dependent on food, the government will not only complicate the process in the name of preventing fraud, but it is too late to use digital technology (such as satellite or drone damage assessment) to identify genuine farmers and make crop insurance simple and transparent.
