LAHORE: President Dr Arif Alvi and Federal Insurance Ombudsman (FIO) Dr Khawar Jamil ensured the extension of crop insurance to small farmers after the province of Balochistan and Sindh were hit hard by the monsoon floods last year.

Talking to Business Recorder, the FIO recalled that President Alvi was highly perturbed over the agricultural loss to the farmers of those two provinces and wanted to do something for their rehabilitation.

He said the scheme aims to mitigate the risk of losses of farming communities due to natural calamities. It is applicable and mandatory for all agri production loans of Banks/MFBs for five major crops, i.e. wheat, cotton, rice, sugarcane and maize.

The federal government bears the premium per crop per season for eligible borrowers with landholding up to 25 acres (32 acres in the case of Balochistan) eligible under the scheme. The insurance covers natural calamities like excessive rain, hail-storm, frost, cyclone, floods, drought, crop diseases, and infestation.

The FIO pointed out that dealing with banks was proved a Herculean task for him. He had involved the Securities and Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP) to tackle the adamant behaviour of some banks.

Both the banks and insurance companies keep hammering the point that they are commercial entities working for their commercial interests, therefore, it becomes difficult to mend a middle way to protect the poor people, he maintained.

The FIO pointed out that the facility of Crop insurance is though offered by them but it remains limited to big landlords, as the sole purpose of this scheme is to secure loans from banks. On the other hand, small farmers remain deprived of this facility despite the fact that they constitute 80 percent of the farming community, he said.

Accordingly, I decided to activate the forum of FIO by starting an awareness campaign for small farmers and urged them to avail of Crop insurance to secure their loss in case of any such calamity again. He said various media outlets supported this cause by all means in the larger interest of small farmers in the country.

“I also sought the intervention of President Alvi by suggesting him to constitute a large committee consisting of all the stakeholders,” he said, adding that the President’s office agreed to his proposal and convened a meeting of all the relevant ones.

Since the insurance companies and banks were focused to protect their commercial interests, therefore, it was a challenge for me to convince them for offering Crop insurance to small farmers, he said and added that President Alvi also supported my stance and urged them to help out small farmers, facing a calamity.

“Our efforts proved fruitful and both the banks and insurance companies agreed to extend the scope of Crop insurance to small farmers,” he said.

Copyright Business Recorder, 2023