Tuesday, June 25, 2024


Dhaka Tribune

Shielding farmers from nature's fury

Leading Bangladesh's farmers towards a more resilient future through crop insurance

Update : 22 May 2024, 02:44 PM

As the dark clouds gather ominously over the horizon, farmers like Saiful Islam and many others brace themselves for the unpredictable fury of nature. For them, each passing season brings not just the promise of a bountiful harvest but also a threat of potential devastation. In Bangladesh, where agriculture is the lifeblood of communities, the stakes couldn't be higher.

Recent years have witnessed a dramatic escalation in climate extremes, leaving farmers struggling with unprecedented challenges. From extreme heatwaves to heavy rainfall and cyclonic storms, the fragile equilibrium of agricultural livelihoods hangs in the balance. Amid this climate uncertainty, a beacon of hope has emerged in the form of crop insurance.

Safiul Islam, a farmer from the Biharpur Paschim Para village of Shibganj Thana in Bogra Sadar, exemplifies the transformative impact of crop insurance in safeguarding farmers against the uncertainties of nature. After experiencing consecutive seasons of crop losses, Saiful took a leap of faith by insuring a portion of his land. This decision proved to be a game-changer, providing a safety net against unforeseen calamities. However, for the current season, Saiful did not enrol any land under insurance coverage, and he regrets this decision. Saiful has expressed his intention to enrol in insurance for the next crop cycle.

Similarly, Md Jinnah, from the same village, found relief in crop insurance when his fields were ravaged by climatic upsets. The timely insurance payout not only alleviated some portion of his financial burden but also instilled a sense of security for the future, despite the small amount of money he received from the insurance coverage. For Saiful, Jinnah, and many others, crop insurance is starting to become synonymous with resilience in the face of adversity.

Bangladesh suffers from an acute shortage of agriculture (crop and livestock) insurance products. The overall insurance penetration rate in the country is below 0.5%, according to Swiss Re reports. Backed by the leading non-life insurance company in Bangladesh, Green Delta Insurance Company Limited, and in partnership with BRAC, Syngenta Foundation for Sustainable Agriculture (SFSA) has the objective to expand the penetration of crop insurance among smallholders, distributing the insurance products via BRACs local network and input providers in 32 districts by March 2024. BRAC, however, has an ambitious plan to reach a million clients by the end of 2025.

Currently, two types of crop insurance coverage are being offered: Coverage for crop loss due to adverse climate situations and coverage for yield loss. Farmers enrolled in Weather Index Insurance (WII) will receive insurance claims if their crops are damaged by extreme weather conditions. Farmers enrolled in Area-wise Yield Index Insurance (AYII) will receive claims if their yield is reduced by natural calamities such as heavy rainfall, drought, crop diseases, or insect attacks, etc. In both cases, farmers do not need to file claims; the local BRAC office will contact them and distribute the insurance payments.

Saiful took a leap of faith by insuring a portion of his land. This decision proved to be a game-changer, providing a safety net against unforeseen calamities

Expected impacts of crop insurance include the protection of smallholder farmers and their investments from financial losses due to climate risks, greater resilience against climate change through capacity building and agro-advisory services, improved access to loans due to insurance cover, and strengthening the business model of Micro Finance Institutes (MFI) and other input providers by bundling and non-bundling insurance with their products and services. 

In a country where agriculture forms the backbone of the economy, the imperative to safeguard farmers' interests has never been more pressing. However, the journey towards comprehensive crop insurance coverage is far from over. As we navigate the complex terrain of climate adaptation, concerted efforts are needed to address existing gaps and enhance outreach to vulnerable communities.

According to data from the BRAC Microfinance Department, over the last four years (2021-2024), they have distributed 152,839 crop insurance policies to farmers. In 2021, the total number of enrolled farmers was 966 (combining WII and AYII), which has increased to 57,898 for the current Boro season. This indicates a significant jump of around 60% in enrolled farmers for crop insurance during this period, suggesting a promising future for this initiative. These numbers not only reflect increased resilience at the grassroots level, but also augur well for the nation's food security objectives. Yet, there is still a long way to go, as this number remains very insignificant compared to the total number of farmers.

Raising awareness among farmers about the value proposition of crop insurance is paramount. By demystifying insurance mechanisms and highlighting its tangible benefits, we can empower farmers to make informed decisions and embrace risk mitigation strategies.

Moreover, there is a pressing need to fine-tune insurance products to better align with the diverse needs of farmers. By incorporating localised risk factors, innovation holds the key to enhancing the effectiveness of crop insurance schemes.

Furthermore, developing strategic partnerships between government agencies, insurance providers, and grassroots organisations is essential for sustainable implementation. By leveraging collective expertise and resources, we can ensure that crop insurance becomes an integral component of agricultural resilience-building efforts.

As we are facing the daunting challenges posed by climate change, the case for robust crop insurance mechanisms has never been stronger. By safeguarding farmers' livelihoods and bolstering their capacity to weather adversity, we not only uphold the principles of social equity but also fortify the foundations of food security.

In the words of Saiful and Zinnah, whose resilience is a perfect example of the spirit of Bangladesh's farming communities, crop insurance is not just a financial instrument but a beacon of hope amidst uncertainty. As we chart a course towards a more resilient future, let us rally behind initiatives that empower farmers and safeguard their livelihoods against the unpredictable whims of nature. After all, the prosperity of a nation rests on the shoulders of those who tirelessly work to feed us.

ANM Golam Kibria is the Lead, Media Relations, Communications at BRAC. Email: [email protected].

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