Longan approved as newest insured commodity

Crop insurance for longan, the country’s third agricultural insurance after rice and dairy cattle, was launched yesterday, with corn likely to be the next product, according to the Office of Insurance Commission (OIC) chief.

Longan farmers in 24 districts in Chiang Mai province can buy the parametric weather protection product, said secretary-general Suthiphon Thaveechaiyagarn.

The longan parametric weather insurance uses satellite data to provide compensation in the event of drought, he said, adding that two insurers, Thaivivat Insurance and Sompo Insurance Thailand, are selling the product.

Some 100,000 rai of longan plantation area will be covered by the new crop insurance, Mr Suthiphon said.

Longan growers who are in debt to the Bank for Agriculture and Agricultural Cooperatives (BAAC) are entitled to buy the new crop insurance at a price of 299 baht for every 10,000 baht farmers owe to the statebacked farm bank. They will be paid compensation of up to 2,100 baht per insurance unit in case of drought.

The insurance will be sold until Feb 28, and the coverage will start from March 1 to April 30. Mr Suthiphon said the insured farmers can claim for compensation of 900, 1,200 or 2,100 baht per insurance unit, depending on the magnitude of drought.

The compensation will be paid to the insured farmers’ accounts opened at the BAAC, he said.

Corn is expected to be the next crop covered by the insurance, he said.

Chayanna Siripirom, chief executive of Sompo Insurance Thailand, said drought is measured by the GSMaP programme, an innovation of the Remote Sensing Technology Center of Japan.

The programme, which amassed 20-year historical data, showed that the plantation cost of longan stood at 8,000-10,000 baht per rai, while damage averaged 2,000-3,000 baht per rai.

Meanwhile, BAAC senior executive vice-president Nipat Kuasakul said the bank has lent 16.8 billion baht to longan farmers nationwide with a combined plantation area of 1.14 million rai.

In Chiang Mai province alone, the BAAC has 15,000 longan farming clients with total plantation area of 312,985 rai. The bank has loaned them 6.6 billion baht through 51,604 contracts.