doing business in myanmar – what you need to know as a singaporean
Climate change is becoming a growing concern around the world, especially for farmers in Asia. Now, one village in Myanmar is seeking protection with a new type of insurance.
In a village located on the outskirts of Pyay in central Myanmar, most residents make a living by growing rice. But for the past several years, severe droughts have taken a toll on their crops. Government officials say that in the last 5 decades, Myanmar’s rainy season has shrunk by about 30 days. Some experts blame the decreased rainfall on climate change.
One of the people feeling the effects is 56-year-old rice farmer Maung Gyi. “The droughts are making it a struggle to get good crops,” he says. Maung Gyi lives with his son and family. Their household income has dropped, leaving them unable to repay government loans they took out to support their farm. “Some families had to borrow even more money to repay loans, and ended up bankrupt,” he says.
One Japanese insurance company, Sompo Japan Nipponkoa Insurance, may have a solution. It’s looking to expand its business in Myanmar, and its employees have come to the village to share a proposal with the farmers. They say their firm can offer protection in times of drought. “I heard there was little rain here from 2012 to 2015. When did the rainfall start coming up short last year?” asks Senior Deputy Manager Ken Gohara.
“In September — the harvest season,” responds a villager. The firm created a product different from its previous ones. Normally, insurers calculate the damages incurred by each farm individually, a time-consuming and costly process. But under this system, a set amount is paid if the rainfall comes in below a pre-determined level. This means it takes less time to calculate payouts, which results in premiums that are relatively cheap.
“We can provide a safety net to farmers who had no protection from droughts and floods. I think that’s pretty significant,” says Gohara. The new product was developed in cooperation with a government-run insurance company in Myanmar. They plan to launch it next year.
Maung Gyi is thinking about getting the insurance. If a drought hits, he’ll be eligible for over US$2000 in coverage by paying an annual premium of about US$40. “I don’t think the price is very expensive. Having it will be helpful,” he says.
Hopes are high that the new insurance will serve as a safety net for farmers and bring about sustainable agricultural growth for the country.
Source : NHK World
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