Farmers Sleep Better with Crop Insurance: Public-Private Partnership Project Promotes Risk Management among Rice Growers

Boonserm Gochouy
Boonserm Gochouy

Never in his life had farmer Boonserm Gochouy experienced a drought as bad as that of last year. Due to a shortage in water supply, his 62 rai of rice in Central Thailand’s Chai Nat province were ruined. Nothing was left, not even a little for household consumption.

“There was some rain but somehow the water just went. There was no water in the pond or in any of the natural sources,” said Gochouy, who has been a farmer in Hanka District for 30 years. Luck, however, didn’t completely desert him. He was able to harvest his crop grown on a small plot of land near a dam on the other side of town and this was adequate to feed his family. In addition, his loyalty to the Bank of Agriculture and Agricultural Cooperatives paid off and helped him survive.

Last year the officer from the bank asked me whether I would be interested in buying rice insurance and I said yes. He told me it was for my benefit. The bank has always provided good support and service to me over the years and I was confident that if it were offering such a scheme, it would be to the benefit of the farmers.

Farmers Sleep Better with Crop Insurance Public-Private Partnership Project Promotes Risk Management among Rice Growers Author and Photographer: Rojana Manowalailao ASEAN Sustainable Agrifood Systems “It is like an investment. There is a risk in crop planting. No one knows what will happen in the season to come. There could be flooding, a drought or disease. Putting aside some savings for the rice insurance can at least guarantee I will get some money back, at least to cover my initial investment. Also, my family won’t have to suffer harsh living conditions because of the risks,” said the father of three.

Finance Minister Sommai Phasee visiting the green farmer booth
Finance Minister Sommai Phasee visiting the green farmer booth

Thailand’s Bank of Agriculture and Agricultural Cooperatives, a state-run bank, has been instructed to arrange the insurance scheme in collaboration with insurance companies.

This year, the crop insurance scheme kicked off in May in Central Thailand’s Ang Thong province with around 300 farmers attending the opening event. Finance Minister Sommai Phasee said at the opening that the scheme is expected to cover 1.5 million rai out of a total 63 million rai of rice paddy nationwide.

“I was pleased to see the happy faces of the farmers and would very much like to encourage all parties to fully promote the scheme so that the target can be met. If all concerned parties push for the scheme, farmers will be able to sleep well at night,” Mr. Phasee said. The Thai cabinet approved 476 million baht to finance the rice insurance scheme for the 2015 harvest year. The insurance premium will be shouldered by farmers and the government.

Farmers who join the 2015 crop insurance scheme are required to pay an insurance premium of 60 – 100 baht per rai, depending on the degree of risk in the location of their farmland while the government will contribute between 64 and 383 baht per rai. Farmers who are customers of the state-owned Bank for Agriculture and Agricultural Cooperatives will receive a discount of 10 baht per rai.

The insurance coverage is 555 baht and 1,111 baht per rai, offering protection mainly from floods, drought, storms, cold weather, fire and disease.

Farmers buying rice insurance
Farmers buying rice insurance

Last year farmers with 800,000 rai participated in the insurance scheme or 1.27% of the country’s total rice farmland of 63 million rai.

Mr. Suriyan Vichitlekarn, GIZ’s ASEAN Sustainable Agrifood Systems project’s regional adviser, attended the launch of the scheme.

“The road to sustainable agrifood systems is long and different factors and efforts are needed. Sustainable agriculture requires sustainable production. It needs environmental friendly inputs and processes, suitable market linkages and business models, and supporting laws and regulations. Risk management for crop insurance is also a path to sustainable agrifood systems,” Mr. Vichitlekarn said.

As a partner, GIZ’s ASEAN Sustainable Agrifood Systems project (www.asean-agrifood.org) provides technical advisory support to Thailand’s Bank of Agriculture and Agricultural Cooperatives through Remote Sensing-Based Information and the Insurance for Crops in Emerging economies (RIICE) project, also a GIZ partner.

RIICE is a public-private partnership aimed at reducing the vulnerability of smallholder rice farmers through the use of remote sensing technologies to map and observe rice growth. Such information can help stakeholders involved in rice production to better manage the risks involved. RIICE is underwritten by five parties, namely Alianz Re, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the Swiss Agency for Development and Cooperation (SDC), the International Rice Research Institute (IRRI), and sarmap. (www.riice.org)

Author and Photographer: Rojana Manowalailao ASEAN Sustainable Agrifood Systems

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