Protecting Prosperity: Pilot Agricultural Insurance Scheme Launched

In a significant move towards safeguarding the interests of farmers, the Bhutanese government has unveiled plans to initiate a pilot crop and livestock insurance scheme. This announcement was made by Thinley Namgyel, Secretary of the Ministry of Agriculture and Livestock, during a recent Meet-the-Press session on June 28.

The scheme aims to mitigate the financial risks faced by farmers due to crop failures, livestock losses, and other related uncertainties. Secretary Thinley Namgyel emphasized the importance of affordability for farmers, hinting at potential government subsidies to support widespread participation.

Initially focusing on key agricultural products such as paddy, maize, potatoes, and oranges, alongside livestock including cattle, pigs, and poultry, the insurance will cover various risks including climate-related disasters, pests, and diseases. This comprehensive coverage seeks to provide a safety net against a range of potential setbacks that farmers often encounter.

Financial details discussed during the session revealed that insurance premiums for crops are estimated at 5.8 percent, with varying rates proposed for different categories of livestock. Cattle premiums, for instance, are set to start at 15 percent in the first year, gradually decreasing to 10 percent thereafter, while pigs and poultry will see a fixed premium of 10 percent.

Secretary Thinley Namgyel highlighted the financial implications of the scheme, estimating an annual premium cost of Nu 2.8 billion if 50 percent of farmers participate. Discussing potential funding models, he indicated the government’s consideration of a cost-sharing arrangement with farmers to alleviate the financial burden.

Prime Minister Tshering Tobgay underscored the need for a thorough pilot project to ensure the scheme’s effectiveness and equitable benefits for all stakeholders. He acknowledged the significant financial commitment required, particularly if the government were to bear the entire premium cost.

Addressing concerns over inclusivity, both Secretary Thinley Namgyel and Agriculture Minister Younten Phuntsho stressed the scheme’s potential to benefit low-income farmers disproportionately affected by crop and livestock losses. Minister Younten Phuntsho highlighted the recent establishment of a crop and livestock compensation trust fund, underscoring the government’s commitment to bolstering agricultural resilience.

The National Assembly’s recent approval to allocate substantial funds to the agriculture and livestock sectors underlines a broader governmental initiative to prioritize agricultural development in the country’s upcoming 13th Plan. However, challenges regarding budgetary constraints and financial sustainability remain critical considerations moving forward.

Looking ahead, the Ministry of Agriculture and Livestock has been tasked with presenting a detailed implementation report in the next parliamentary session. This report will shed further light on the operational framework and expected outcomes of the insurance scheme, signaling a pivotal step towards enhancing Bhutan’s agricultural security and sustainability.

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