The Weather Insurance Program

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The Weather Insurance Program

Apart from the income guarantee scheme for farmers, the weather insurance program is another new policy about to be launched by the government, in cooperation with the private sector to ensure a level of financial security for Thai farmers. A Memorandum of Understanding was signed on 25 January 2010 between the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) and Sompo Japan Insurance (Thailand) Co Ltd to conduct the weather insurance program by using the rainfall index.

The weather insurance program will compensate farmers by using a rainfall and drought index, determined by the Thai Meteorological Department. Fifteen percent of the insurance coverage will be compensated to farmers by the company if the rain index from July to September is below the specified drought index. In cases where the rain index is severely below the drought index, compensation can be increased up to 40% of the insurance coverage. The BAAC will act as a mediator between farmers and the company in selling insurance policies and paying the compensation.

According to BAAC President, Luck Wajananawat, the bank has tested out the insurance program with 276 maize farmers and 5,733 rai in five districts of the northeastern province of Khon Kaen. The bank this year will conduct a test run with all districts in the province, and more than 1,000 farmers are expected to participate in the project. The program will be expanded to other provinces if the two-year operation is successful. The Thai Meteorological Department will specify the definition and drought index for each type of crops if the project will be implemented nationwide.

Meanwhile, Horticultural Science Society President, Dr Ananta Dalodom suggested the government help farmers partially pay for the insurance premium and help determine if the premium collection rate was appropriate. He added that the government must also ensure that the specification for the drought index and other related details on damage evaluation were well defined and accepted by all stakeholders from farmers to the insurance company.

It is undeniable that farmers have their fate hung on the nature, which tends to be unstable and increasingly unpredictable. On the other hand, their incomes and livelihood depend on their harvests. Any attempts to give more security and benefits to their lives are indeed very good to strengthen the very core of the nation. Although a weather insurance program is not yet conducted across the country, it is a hopeful start and a worthwhile effort to follow the future progress of the project.

-- NNT 2010-02-23

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Related link to detailed weather forecast for your region: weather.thaivisa.com