The government has decided to introduce a coordinated agricultural insurance system taking financial and technical supports from the World Bank.
The proposed insurance will cover three agricultural sectors – fisheries, livestock and crops.
Officials said once implemented, the insurance system is expected to draw local and foreign investments in the country’s agricultural sector.
Earlier, a pilot project on crop insurance was launched with the help of Asian Development Bank.
After failure of that project, another pilot project of weather index-based crop insurance is now going on, officials said.
A meeting was held between Banking Division officials and the World Bank scoping mission for agricultural insurance in Bangladesh on November 18.
The meeting sources said the World Bank mission would make a report on agriculture insurance for giving fund and technological assistance to the government of Bangladesh.
The meeting observed that 99% of the country’s insurance market remained still unexplored and the country has huge potentials to flourish the business.
It said the proposed agricultural insurance will help to expand the business as it is expected to attract foreign and local investors in the country’s agriculture sector.
Banking Division Secretary M Aslam Alam presided over the meeting.
He said: “As the earlier pilot project yielded no good result, we went for a new one in 2013.”
The state-run Sadharan Bima Corporation came up with those projects – the first one in 2009 and the second is in 2013.
The secretary said the government is also planning to launch crop insurance in private sector too under the Public-Private Partnership initiative.
IFC, an arm of the World Bank, has already signed an agreement with Green Delta Insurance for the project.
Nasir A Choudhury, adviser and founder managing director of Green Delta Insurance, said the company initiated conducting a study on crop insurance in rural areas.
“After receiving the study findings, we will go for launching the crop insurance in private sector,” he said.
In September, the government signed four primary deals with the World Bank to help develop financial sector of Bangladesh and ensuring better facilities for the stakeholders. Agriculture insurance project was one of them.
The agreements were signed on the sidelines of a seminar on the bank’s financial assistance programmes in Washington DC.
The crop insurance project will be extended across the country in association with the commercial banks.
The Japan Fund for Poverty Reduction provided a $2m grant for the pilot project on weather index-based crop insurance while the Bangladesh’s government is also providing in-kind support worth $420,000.