Drought sees more Thai farmers taking out insurance

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Drought sees more farmers taking out insurance
SUCHEERA PINIJPARAKARN
THE NATION



BANGKOK: -- THE ONGOING severe drought has encouraged more rice farmers to buy main-crop insurance, as they are now increasingly aware that coverage helps hedge against harvest failure caused by natural disaster and that they can claim if their plants are damaged.

Meanwhile, the Thai General Insurance Association will seek a discussion with the executive committee of the National Catastrophe Insurance Fund, requesting that the fund reinsure some main rice-crop insurance from local insurers, in order to encourage yet more use of insurance among farmers, association president Anon Vangvasu said.

Last year, farmers of around 700,000 rai (112,000 hectares) out of a total of 60 million rai of main-rice crop purchased the insurance.

The association projects 1.5 million rai will be insured this year, as it believes rice farmers now have more awareness of the importance of insurance as a risk-reduction tool, he said.

The current drought affecting much of the country has caused rice farmers to buy insurance, while the government helps via a scheme to subsidise them to the tune of 80 per cent of the premiums, he added.

At present, seven insurers offer main rice-crop insurance through branches of the Bank for Agriculture and Agricultural Cooperatives.

This year's coverage is available from May 6 to August 14, with about 20 per cent of the expected 1.5 million rai of main rice-crop coverage projected by the association having already been purchased by farmers, Anon said. With the major harvest starting in August, the association expects many farmers will buy insurance that month.

The association chief said that in other countries, the government would not directly subsidise farmers in the event of crop failure or damage, but would use the insurance mechanism to help tackle risk from natural disasters, including drought.

In Thailand, in order to reduce the government's subsidy, the National Catastrophe Insurance Fund should participate in the scheme by facilitating reinsurance, as local insurers are currently unable to shoulder all the risk and need to transfer some of it to foreign reinsurers, he explained.

Local insurers would prefer to shoulder more of the coverage and reduce the transfer of cover to international reinsurance companies, as premiums from Thai clients should be handled by Thai firms, he said.

The National Reform Council agrees with the reinsurance idea, which the association will discuss further with the National Catastrophe Insurance Fund, he said.

Moreover, the association projects that the main-crop rice-farming area covered by insurance next year will soar to between 3 million and 5 million rai.

"We will track the performance of insurance for the main rice crop for at least three years before proposing to the government that it expand insurance coverage to other economic crops, such as corn and sugar cane," Anon said.

Meanwhile, Arnon Opaspimoltum, deputy managing director of Viriyah Insurance - one of the seven main rice-crop insurance providers - said rice farmers now had more awareness of the benefits of buying insurance due to the uncertainty and risk of the weather.

Source: http://www.nationmultimedia.com/business/Drought-sees-more-farmers-taking-out-insurance-30263297.html

-- The Nation 2015-06-29

[BigBadGeordie]

Is this a "paid" advert?

[bamnutsak]

The current drought affecting much of the country has caused rice farmers to buy insurance, while the government helps via a scheme to subsidise them to the tune of 80 per cent of the premiums, he added.

Interesting. More "rice schemes".

[Bluespunk]

Nice bit of advertising.

I wonder if the the reporters family is involved in insurance?

[FloridaExport]

So, you can buy insurance the same month you are supposed to harvest your rice? Seems like a no-brainer to wait until you are sure it will fail before buying the insurance.

[wabothai]

There is a drought, you lost your crop, and you just buy insurance. So.....

Oh my God !!!!

[Colabamumbai]

Maybe Jingluck will chip in.