October 3, 2021 | Investopaper
The agricultural (crop and livestock) insurance in Nepal has increased by 61 percent in the last fiscal year. In FY 2077/78, non-life insurance companies have collected a premium of Rs. 1.90 Arba from agricultural insurance, which is Rs. 72 crores more than the previous fiscal year. In the fiscal year 2076/77, the agricultural insurance had grown by 17.61 percent and the companies had collected about Rs. 1.18 Arba as premium through agricultural insurance.
With the government subsidy, the business of agricultural insurance has expanded in Nepal. The government provides 80 percent of the premium amount as a subsidy for agricultural insurance. Suppose, an insurance premium of Rs 10,000 has been fixed for any farmer who wants to insure his livestock or crops. But the farmer has to pay only Rs 2,000. The remaining Rs 8,000 insurance premium is subsidized by the government.
Out of the total insurance premium collected in FY 2077/78, the government has provided Rs. 1.42 Arba as the subsidy. In the fiscal year 2076/77, the government had paid Rs 88.62 as the subsidy on the insurance premium.
Premium Collection From Agricultural Insurance
The table below presents the premium collection from agricultural insurance in Nepal.
|Fiscal Year||Premium (Rs In Crores)|
Source: Insurance Board
Related Contents: Premium Collection of Insurance Companies In Nepal
Agricultural Insurance In Nepal
Agricultural insurance was started commercially from FY 2070/71. In the first fiscal year 2070/71, the insurance companies collected Rs. 2.26 crores through agricultural insurance. This has increased to Rs 1.90 Arba as of the fiscal year 2077/78.
The share of agricultural insurance in the total insurance business has reached about 12 percent. The Insurance Board has assigned the districts and the mandatory areas of work for the general insurance companies to provide agricultural insurance services in all districts.
At present, insurance companies have increased access to agricultural insurance at the local level by collaborating with microfinance institutions at the local level. In addition, the government has designated districts for insurance companies to do business in agriculture.
Currently, there are more than 22 products under agricultural insurance. Goats, fish, poultry, and other livestock can be insured through livestock insurance. Similarly, crop insurance includes rice, ginger, orange, turmeric, mushroom, and other crops.
The increase in awareness among the farmers about agriculture insurance along with the initiatives by the government has also led to the growth of this business.
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