Crop insurance, which is of vital importance in agro-centric Myanmar, will soon be available to farmers who must regularly risk floods and other natural disasters that could potentially wipe out their harvest and their income for the season.
A supervision committee on private insurance enterprises announced that private insurance companies established after 2013 will be granted permission to offer new kinds of insurance policies in addition to traditional types of insurance, comparable to international insurance markets. Included in the new types of offerings will be crop insurance, it was learnt.
Crop insurance is common in countries such as the U.S., Russia and Japan, and in regional countries such as India, Thailand, Viet Nam, Laos and Cambodia.
In October 2016, Global World Insurance Company submitted a plan offering crop insurance to the Supervision Committee on Private Insurance Enterprises. With a new government, it has been learnt that new kinds of insurance will be granted with the encouragement of the private sector. Crop insurance, once unavailable, will be launched as a pilot project, it was learnt.
“We had a desire to launch the servicing of crop insurance three years ago. But no one encouraged us, saying that we would make a loss. So we studied how it was managed in other countries and whether there were any company which went bankrupt. We found that state-owned enterprises, joint ventures and government-subsidisedcompanies were operating. The main objective of offering crop insurance is to help farmers — 70 per cent of the populace are earning their lives by farming on 16 million acres of land — to upgrade the living standards of farmers and to help grow crops on destroyed farm land due to drought, floods and severe weather.
For the government alone, it is difficult to fulfil all these requirements. In the years of the worst weather, if farmers could get compensation from crop insurance, according to their volume of destruction, they need not worry about the current and the following years. And the decrease in production will become less frequent”, said U Soe Win Thant, Director of Global World Insurance Company.
U Soe Win Thant said crop insurance will be offered in Yangon Region as a pilot project only for certain crops.
“The risk may be great, so we submitted to launch it in Yangon Region, which is within our reach, as a pilot project for two years. Firstly rice, the staple crop for the country, will be introduced. Premium fees may be Ks5,000 per acre. We need the cooperation of the departments in doing so.
It must be carried out based on trust. Compensation can be demanded with the recommendation of respective village administers and managers of the agricultural department. As for the company, we must appoint experts and professionals. Had we acquired facts and information of the agricultural department and meteorological department, cooperation of authorities concerned and awareness of the people toward insurance, enactment of compulsory law and support of financing, crop insurance will be successful very soon.”
Crop insurance has never been available in Myanmar, in large part because it was believed that a profit could not be made, experts said. Insurance experts concluded that it would be beneficial in the long term, especially in Myanmar, a developing country.
With the influx of foreign companies in Myanmar, crop insurance will be vital. Presently 11 private companies are offering 9 kinds of insurance in the country, with other new kinds of insurance to be permitted, it is learnt.
Source: The Global New Light of Myanmar
