Crop insurance in the spotlight

To spread awareness of the importance of insuring crops and build trust for the product among Cambodian farmers, the German national development agency, known as GIZ, and insurance companies held yesterday the Kingdom’s first workshop on training crop insurance advisers.

Speaking yesterday at the workshop ‘Training Trainers on Crop Insurance Literacy,’ Günter W. Riethmacher, GIZ country director, said crop insurance gives farmers the confidence they need to start investing in their fields and treat their farming operations as a business.

“As farmers learn that insurance companies can cover certain risks that they might face, they can make investments in their farms that they previously might have avoided because of the risks.

“This means that farmers can make the most productive use of their scarce resources and make their farm as profitable as possible,” Mr Riethmacher said.

Crop insurance is a promise between farmer and insurer, Mr Riethmacher explained. It allows a person to pay a small amount of money in advance in exchange for a promise that when a bigger loss occurs, the insurance company will return the insured person to his initial financial position, he said.

The workshop, which was attended by about 20 people, sought to train insurers, NGOs and government officials on crop insurance and equip them with the skills they need to efficiently convey to farmers how insurance works and what are its benefits.

Ty Sokhun, Secretary of State at the Ministry of Agriculture, said crop insurance can contribute to poverty reduction, and can minimise the economic damage caused by droughts, floods and climate change.

“We called on all development partners to help boost the crop insurance sector to make the agricultural industry more sustainable and help alleviate poverty.

“We need more insurance options that can help enhance financial security for farmers,” he said.

Mr Sokhun explained that insurance in the farming industry is still a novel service and that, at this stage, insurance providers must focus their efforts on raising awareness of its benefits.

Ny Lyhoung, general manager at Forte Micro Insurance, told Khmer Times they started offering crop insurance in 2014 in the provinces of Kampong Thom, Siem Reap, Battambang, Pursat and Banteay Meanchey, and that now about 100 farmers have taken out policies with them.

“Our insurance products here mostly target rice in the rainy season. We have policies that insure farmers against droughts and floods.”

Mr Lyhoung said they are planning on expanding beyond rice in the near future.

He said, on average, farmers tend to insure 2.5 hectares of paddy field.