In agricultural Bangladesh, farmers carry the main risk of feeding the nation. Farm production depends on soil, water, climate, care and timely inputs, and even when all goes well, farmers cannot be sure the full harvest will come home. Bangladesh is first among the world's ten most disaster-prone regions, and farmers now take on extra risk as they diversify into high-value crops. If farmers do the state's job of feeding the nation, Seraj asks, why should the state not share their risk?

Based on a 1976 FAO report on crop insurance for developing countries, the government launched a pilot crop insurance project in 1977. It slowed after 1981 but ran until 1995. A 1996 committee made recommendations but got no direction, and a Finance Ministry report in January 1999 recommended insurance at nominal premiums. Farmers never actually saw crop insurance.

Since 2005, Seraj has raised crop insurance at pre-budget discussions with farmers. In 2009, Finance Minister Abul Maal Abdul Muhith gave it special importance. Now the Asian Development Bank (ADB) and Japan have formed a joint fund: the Japan Fund announced a 2 million dollar grant, approved by ADB, for a weather index-based crop insurance pilot, with the government investing 420,000 dollars. Over three years it aims to benefit at least 12,000 farm families in selected districts; premiums could reach 40 per cent in some cases. With help from the Japan Aerospace Exploration Agency, 20 weather stations will be upgraded and 400 people trained, and awareness seminars will reach at least 6,000 small and medium farmers. The project is linked to ADB's Second Crop Diversification Project (SCDP).

Crop insurance for rice may not come quickly, he writes, but high-value fruit such as mango, jujube, lychee, guava, strawberry and dragon fruit, and subsectors like poultry, fish and dairy, could be insured easily; fish farmers even lose ponds to poisoning by rivals. He proposes: insurance for high-value crops, poultry, fisheries and dairy together; a third institution sharing risk between farmers and insurers; nominal premiums; and classifying farmers (large, medium, small, landless, sharecroppers) first. The World Bank says insurance should benefit marginal and poor farmers.

Source: Shykh Seraj. First published in Bengali on The Agro News.