Despite government’s failure to respond to royal insurance corporation’s proposal to introduce crop insurance, it hopes to be able to commence in April next year.

But that is still subject to government’s approval.

The royal insurance corporation of Bhutan (RICBL) submitted its proposal to the finance ministry in September 2008.

The corporation officials said the proposal was submitted, in collaboration with agriculture ministry, learning of the increasing number of people requesting for compensation for crop damages from the government.

Agriculture ministry’s chief of policy and planning division, Tenzin Chophel, said they were still awaiting finance ministry’s response.

He said such a scheme would create communal resilience for communities, and whether a crop damage was major one or not, the resilience would hold firm.

Insurance official said the proposal was for the benefit of farmers, which was more of a social service than profit making venture.

Should the government approve the proposal, insurance officials said the crop insurance scheme would be categorised as marginal, small and big land holdings.

Land less then an acre would be considered marginal, those between one and three acres would be small, and land holdings more than three acres would be considered big.

Insurance officials said marginal land holdings would be assured Nu 40,000 should a disaster of a minor type strike, Nu 60,000 for small ones and Nu 100,000 for big land holdings. The government would have to step in should the disaster prove to be a major one.

“A landowner has to pay Nu 400 a year, if he owns marginal land; and that is a nominal premium we have kept,” he said. Premium is kept one percent against the sum assured. “The other 99 percent liability against one percent will be borne by the government as a subsidy.”

The insurance would cover for crops damaged by natural calamities like rain, storm and flood and others destroyed by pests and diseases or wildlife.

Insurance officials said crops would be insured; depending on what grew most in a particular dzongkhag.

“The decision was reached after consulting the agriculture ministry, dzongkhag authorities and people to avoid any disparity among dzongkhags,” the insurance officer said.

“We’re ready to initiate the scheme immediately after government finalises everything,” Tenzin Chophel said.

Department of disaster management director, Namgay Wangchuk, said such an initiative would reduce people’s dependence on government’s compensation for minor disasters.

“It’s important that people understand the difference between a major and a minor disaster,” he said. “The scheme will compensate for minor disaster damages.”

People, he said, turned to the government for Nu 300 compensation for crop damages. “Disaster refers to destruction to whole community, with huge losses beyond their coping capacity,” he said.

The destruction of a few crops by wildlife and natural calamities are normal incidents that occur everyday in a farmer’s life.

“These are known as isolated local disaster, which don’t necessarily draw compensation,” he said. “Such losses can be covered under an insurance.”

If only the disaster management bill was passed this year, Namgay Wangchuk said, people would have been clear about how to manage major and minor disasters with available resources given to each dzongkhag by the department.

The government spent 33.52M euros on crops, irrigation and wildlife damage in almost all 20 dzongkhags, which the Austrian government donated during the cyclone Aila last year.

“Remaining 1.1M of the 34M euros will be used for irrigation channeling through pipes in remote villages in Punakha,” Namgay Wangchuk said.  Source: Kuenselonline