The BAAC says losses from rice in­sur­ance will rise to an es­ti­mated B1bn this year be­cause of up­coun­try floods

Flood­ing puts a dent in crop yields as in­sur­ance scheme ex­pands fur­ther

Bangkok Post - - BUSINESS - WI­CHIT CHAN­TANU­SORN­SIRI

A life­long pas­sion for re­tail drives this en­tre­pre­neur as she tends to her fam­ily’s eastern em­pire

The state-owned Bank for Agri­cul­ture and Agri­cul­tural Co­op­er­a­tives (BAAC) says losses from rice in­sur­ance will in­crease to an es­ti­mated 1 bil­lion baht this year from 819 million in 2016, mainly be­cause of a re­cent flash flood in the North­east.

In Sakon Nakhon alone, 900,000 rai of rice fields are pro­jected to have been dam­aged by the flood, with 40% cov­ered by crop in­sur­ance, said pres­i­dent Apirom Sukprasert.

He said 1.5 million rice grow­ers this year took out crop in­sur­ance poli­cies cov­er­ing an area of 23.8 million rai, down from 27 million last year, as some rice fields were in­un­dated shortly be­fore the grow­ing sea­son started. Just 53 million rai was planted with rice this year, down from 56 million last year.

Some 224 million baht has been claimed this year, Mr Apirom said, adding that rice farm­ers in 2016 claimed 819 million for dam­age to 746,000 rai.

The BAAC is de­vel­op­ing a model to al­low the in­sur­ance cov­er­age for rice to be in­creased to the level close to pro­duc­tion costs, but farm­ers must pay a premium for the ad­di­tional cov­er­age.

The cab­i­net in June ap­proved a rice in­sur­ance scheme for the first crop of the 2017 sea­son, worth 2 bil­lion baht. The scheme, run by the BAAC, cov­ers six nat­u­ral disas­ters: floods, drought, storms, cold, hail and fires.

Un­der the scheme, farm­ers re­ceive com­pen­sa­tion of 1,260 baht per rai, up from 1,111 of­fered last year, in cases where crops are dam­aged by nat­u­ral disas­ters. They can fur­ther se­cure 630 baht per rai from dam­age caused by pests and dis­eases, up from 555.

The scheme charges an in­sur­ance premium of 97.40 baht per rai, down from 107.40 last year.

Even though the rice in­sur­ance com­pen­sa­tion has in­creased this year and the gov­ern­ment is con­tribut­ing another 1,111 baht per rai to farm­land in ar­eas that have been de­clared dis­as­ter zones, the com­bined com­pen­sa­tion is still far lower than the av­er­age pro­duc­tion cost of 4,000 baht per rai.

Mr Apirom said the BAAC is also con­duct­ing a study to ex­tend the ser­vice to other agri­cul­tural prod­ucts, start­ing from corn and dairy cows, to be in line with Fi­nance Min­is­ter Apisak Tan­tivo­ra­wong’s pol­icy, which would see crop in­sur­ance cover all ma­jor farm prod­ucts.

Crop in­sur­ance on maize could be of­fered in a man­ner sim­i­lar to that for rice, while dairy cows could have sev­eral op­tions for pro­tec­tion, such as in­sur­ance for milk out­put and price.

Farm­ers in Sam Ngam dis­trict, Phi­chit put har­vested paddy on a boat af­ter their farm­land was in­un­dated af­ter heavy rains.

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