IB set to launch output base insurance product

Kathmandu, Sept. 17:

The Insurance Board (IB) is set to introduce an output base insurance product to compensate the farmers with the price risks.

According to Assistant Director of the IB Rajendra Maharjan, the new insurance product will include 49 agricultural products ranging from fruits, cereals to vegetables.

Speaking at the Agro Investment Forum organised by the International Labour Organization (ILO) the other day, he said that the product was on the final stage of preparation and would be launched within a couple of weeks.

The new product would be implemented in all 77 districts across the country through the insurance companies.

As the IB had directed the insurance companies to cover all the districts in terms of agriculture and livestock insurance, insurers are present across the country.

Agriculture and livestock insurance was launched in January 2013 which facilitated the insurers to sell vegetable, fruits, cereals and livestock insurance products.

Crops insurance covers the production cost that a farmer invests till the crops or horticulture is harvested while livestock and poultry insurance were launched to provide coverage of domesticated animals and birds like buffalos, cows, goats, sheep, pigs, chickens and others.

Under the agriculture and livestock insurance framework, insurers and customers will bear 90 per cent and 10 per cent of the actual loss respectively.

But, the output based insurance is introduced for only apples of Jumla, seeds and Chaite dhan (spring rice) so far.

Advocacy Office of the ILO Devendra Dhungana said that 96 per cent workforce in Nepal was involved in informal sector so it was necessary to formalise the businesses.  

Delivering presentation on ‘Multinational enterprises declaration: ILO instruments for enabling environment’, he said, “Enterprises – whether multinational or domestic – have a crucial role to play in direct and indirect employment creation and skills development in rural areas, as well as the respect of rural workers’ rights.”

According to him, the state has a role in protecting workers’ rights in law and create a conducive environment for responsible business through policy coherence, and the business community has to respect workers’ right in operation, ensure effective supply chain management and encourage business partners to respect workers’ right.

Siddant Raj Pandey, Managing Director of Business Oxygen, said that Nepali entrepreneurs should bring in best international practices.

He said that as the country imports agricultural products of about 2 billion US Dollars, there was a huge potential in agriculture and agro-processing.

The forum deliberated on agricultural investment outlook, enabling factors and support system for agro investments, solutions to bottlenecks and challenges in the agro sector and prospects for agro sectors.