Writer: Metta Kongphan-apirak, Project Coordinator, Remote Sensing-based Information and Insurance for Crops in Emerging Economies (RIICE)
Crop insurance has been put forward as an important tool to protect small-scale farmers from losing their money.
“This is an important meeting. The ministry’s expertise is agriculture, not insurance. This is why we need to involve stakeholders in public and private sectors and with many rounds of discussion,” Dr. Chan Phaloeun, who is under the secretary of state, Ministry of Agriculture, Forestry and Fishery (MAFF) told the High-level Inter-Ministerial Meeting on Crop Insurance.
Damage in the natural disaster-prone areas costs millions of dollars to the national budget annually to provide direct aids to the affected population and to restore damaged infrastructure.
Although the crop insurance is considered as one of the most promising risk adaptation tools, Cambodian farmers remain skeptical over the objectives and benefits of the insurance since it is a very new concept among the farmers.
During the meeting, the participants devised an action plan for the national crop insurance and the solutions that prove to be the most appropriate for Cambodian environment.
“To set up a national crop insurance, farmers should develop an understanding and awareness on the insurance and the benefits the insurance will bring to farmers,” said Mr. Ny Lyhoung, Vice President of Forte Insurance.
It takes time for the government, development partners and relevant stakeholders to educate and build trust among the farmers, he added.
The workshop was concluded with some recommendations and consideration for the way forward as there is strong interest amongst the public and private sectors for developing an agricultural crop insurance policy and supporting frameworks.
One of the recommendations was to promote and implement the parallel testing of different agricultural insurance products such as weather index insurance and area-yield index product as experience of product testing may help to design appropriate insurance product suitable for Cambodia’s context and its farmers’ needs.
The meeting also called for ways to seek great supports from the public sector that could engage in different areas of activities, especially providing resources for risk financing or catastrophic risk sharing while premium subsidies remained top of the agenda.
Insurance Regulatory Authority and Central Bank of Cambodia should get involved in the next steps.
Nearly 50 representatives from government agencies attended the meeting which was organized in Phnom Penh, Cambodia on 28 November 2019.