The Insurance Board (IB), the insurance sector regulator, has introduced seed crop insurance to provide protection to seed producers against losses inflicted by pest, diseases, adverse weather conditions, and natural disasters.
The Deputy Director, IB, Kudan Spkota aid, the insurance policy, which was strictly designed for those who grow seeds of all types of cereal crops in bulk, has been circulated among non-life insurance companies. This insures will now have to sell policies accordingly.
According to him, one of the beauties of this product is that compensation will be extended based on projected yield.
“This means if producers fail to harvest the quantity of seeds projected at the time of purchasing the insurance policy, they can file a claim and demand for compensation,” Sapkota stated.
Also, the insurance policy covers losses cause by fire, lightening, earthquake, flood, drought, landslide, cyclonic storm, hailstorm, snow, sleet, other disasters, pests and diseases.
The insurance policy can be purchase upon a premium equivalent to 5 per cent of the sum insured.
To be eligible for compensation, seed production should be conducted in at least a hectare of land in the Tarai and inner Madhesh plains, and at least 0.5 hectare of land in the hilly region.
The IB has, however, allowed farmers to pool land to meet the minimum land threshold and become eligible for the insurance scheme.
The productivity of the land will be fixed on the basis of data provided by the Ministry of Agricultural Development, while the price of the projected yield will be calculated based on statistics provided by National Seed Company.
Based on these parameters, insurance companies will pay 50 per cent of the sum insured in compensation if losses are incurred within 15 days of planting.