BAAC starts cow coverage from August
First-ever dairy cattle protection for country
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.