BAAC starts cow cov­er­age from Au­gust

First-ever dairy cat­tle pro­tec­tion for coun­try

Bangkok Post - - BUSINESS - WICHIT CHANTANUSORNSIRI ORANAN PAWEEWUN

The state-owned Bank for Agri­cul­ture and Agri­cul­tural Co­op­er­a­tives (BAAC) will launch the coun­try’s first-ever dairy cat­tle in­sur­ance in Au­gust, in a push to ex­tend cov­er­age to other farm prod­ucts and al­le­vi­ate the gov­ern­ment’s bur­den in pay­ing out com­pen­sa­tion.

The new in­sur­ance prod­uct is tar­geted at dairy cow co­op­er­a­tive mem­bers as all of their cows have been reg­is­tered with the Live­stock De­vel­op­ment Depart­ment, BAAC pres­i­dent Apirom Sukprasert told Post To­day in an in­ter­view.

Some 20,000 dairy cows are ex­pected to be cov­ered by in­sur­ance this fi­nan­cial year, which runs from April 1, 2018 to March 31, 2019, be­fore dou­bling to 40,000 in the next fi­nan­cial year and 60,000 in the fol­low­ing one.

The in­sur­ance will pro­tect small dairy farm­ers against losses from milk pro­duc­tion re­sult­ing from the deaths or ill­ness of their cat­tle.

To at­tract ranch­ers to take out the in­sur­ance, the gov­ern­ment could sub­sidise some pre­mi­ums, he said.

Thai­land’s dairy cow in­dus­try is the big­gest in the Asean re­gion, with over 500,000 cows across the coun­try pro­duc­ing at least 850,000 tonnes of raw milk per year. Milk prod­uct value is over 60 bil­lion baht.

The new in­sur­ance prod­uct’s roll-out is in com­pli­ance with the cab­i­net’s res­o­lu­tion in June last year to re­quire the Fi­nance Min­istry to ex­tend in­sur­ance to other agri­cul­tural prod­ucts to al­low farm­ers and ranch­ers to have a tool to man­age risk and losses in­curred from epi­demics and cow deaths.

Crop in­sur­ance in Thai­land is lim­ited to rice.

The cab­i­net last week ap­proved a rice in­sur­ance scheme for the 2018 sea­son worth 1.84 bil­lion baht, for 29 mil­lion rai of rice fields. 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 for crops dam­aged by nat­u­ral dis­as­ters. They can fur­ther se­cure 630 baht per rai for dam­age caused by pests and dis­eases.

The scheme charges an in­sur­ance premium of 97.40 baht per rai, of which 61.40 baht will be shoul­dered by the gov­ern­ment, while the BAAC pays the re­main­der only for the bank’s cus­tomers. Non-BAAC cus­tomers must cover the rest if they have taken out rice in­sur­ance.

In the 2017 har­vest sea­son, 1.76 mil­lion rice grow­ers with 26.1 mil­lion rai of farm­land were in­sured with a com­bined in­sured sum of 2.53 bil­lion baht.

The in­sured ar­eas of farm­land rep­re­sent 87% of the tar­get of 30 mil­lion rai and about 45% of the coun­try’s to­tal rice fields.

Some 182,000 rice farm­ers with 1.52 mil­lion rai of in­sured rice fields re­ceived in­sur­ance claims worth a to­tal 1.91 bil­lion baht for the last crop sea­son.

De­spite the rice in­sur­ance com­pen­sa­tion plus an­other 1,111 baht per rai in com­pen­sa­tion from the gov­ern­ment for farm­land in ar­eas that were de­clared dis­as­ter zones, the com­bined amount is still far lower than the av­er­age pro­duc­tion cost of 4,000 baht per rai.

A dairy farm in Pak Chong, Nakhon Ratchasima. The gov­ern­ment is hop­ing the new scheme will re­duce the need for com­pen­sa­tion to cat­tle farm­ers.

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