AIRLINK 86.21 Decreased By ▼ -0.99 (-1.14%)
BOP 4.97 Decreased By ▼ -0.05 (-1%)
CNERGY 4.08 Decreased By ▼ -0.01 (-0.24%)
DFML 37.22 Decreased By ▼ -0.68 (-1.79%)
DGKC 91.20 Decreased By ▼ -2.68 (-2.85%)
FCCL 22.99 Decreased By ▼ -0.78 (-3.28%)
FFBL 33.74 Increased By ▲ 1.07 (3.28%)
FFL 9.19 Decreased By ▼ -0.06 (-0.65%)
GGL 10.05 Increased By ▲ 0.02 (0.2%)
HASCOL 6.25 Decreased By ▼ -0.29 (-4.43%)
HBL 126.25 Increased By ▲ 4.33 (3.55%)
HUBC 158.29 Increased By ▲ 12.64 (8.68%)
HUMNL 11.08 Increased By ▲ 0.58 (5.52%)
KEL 4.64 Decreased By ▼ -0.10 (-2.11%)
KOSM 4.09 Decreased By ▼ -0.10 (-2.39%)
MLCF 38.25 Decreased By ▼ -0.55 (-1.42%)
OGDC 133.40 Decreased By ▼ -1.61 (-1.19%)
PAEL 25.40 Increased By ▲ 0.32 (1.28%)
PIBTL 6.22 Decreased By ▼ -0.05 (-0.8%)
PPL 119.25 Decreased By ▼ -0.43 (-0.36%)
PRL 24.58 Increased By ▲ 0.48 (1.99%)
PTC 12.28 Increased By ▲ 0.06 (0.49%)
SEARL 59.32 Decreased By ▼ -0.48 (-0.8%)
SNGP 65.60 Increased By ▲ 0.60 (0.92%)
SSGC 9.87 Decreased By ▼ -0.18 (-1.79%)
TELE 7.85 Decreased By ▼ -0.02 (-0.25%)
TPLP 9.49 Decreased By ▼ -0.25 (-2.57%)
TRG 63.80 Decreased By ▼ -0.50 (-0.78%)
UNITY 27.26 Increased By ▲ 0.21 (0.78%)
WTL 1.28 Decreased By ▼ -0.04 (-3.03%)
BR100 8,341 Increased By 31.1 (0.37%)
BR30 26,457 Increased By 506.8 (1.95%)
KSE100 78,810 Increased By 9 (0.01%)
KSE30 25,474 Increased By 35.6 (0.14%)

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has observed that there is a notable absence of any national crop and livestock insurance schemes catering specifically to non-loanee farmers in the country.

The existing coverage extends to merely 9.5% of the total farming population, with only 787,000 farmers currently enrolled out of a substantial 8.2 million. The challenges faced by non-loanee farmers are multifaceted, exacerbating issues related to affordability, awareness, and resilience in the face of disaster risk exposure.

A new SECP’s report on crop and livestock insurance revealed that a national-level agriculture insurance scheme for non-loanee farmers is a vital tool for promoting resilience, stability, and sustainability in the agricultural sector as it can addresses the unique challenges faced by farmers who may not have access to formal credit and reinforces the importance of securing livelihoods in the face of unpredictable agricultural risks.

A think tank for amending laws to improve agri sector

The constraint of limited affordability significantly contributes to the subdued demand for insurance. In numerous developing nations, the meagre incomes prevalent among the majority hinder the evolution of robust insurance markets. The financial resources of the population are predominantly directed towards essential needs like food and shelter, leaving little room for investing in insurance.

Even when insurance options exist, health and life coverage often takes precedence over agricultural insurance. Rural households engaged in agriculture frequently grapple with insufficient profits to absorb the costs associated with agricultural insurance. In Pakistan more than 95% of the farmers are classified as subsistent farmers with land of 5 acres or lessor.

Another major challenge is the ability to measure risks, collect relevant data, monitor producer’s behaviour, and establish underwriting practices. Individual grower yield based crop insurance and indemnity products require individual farm-level yield data, which is costly to collect even in developed countries.

Index based insurance is also data intensive. Area-yield insurance programs, like the ones, in Brazil or India, require aggregate yield data.

In India aggregate data at the county level have been collected for more than 20 years by the local statistical departments (through crop-cutting experiments) to guide agricultural policy. Likewise, weather-based crop insurance relies intensively on weather data and is dependent on the density of the weather station network and the quality and accuracy of the data collected, the report added.

Copyright Business Recorder, 2023

Comments

Comments are closed.