In partnership between farmers and Myanmar Rice Federation (MRF), Global World Insurance will provide crop insurance services for contracting farming

Global World Insurance is working on providing crops insurance services for contract farming implemented under partnership between farmers and Myanmar Rice Federation (MRF).

Corp insurance is a type of insurance which insures farmers against the loss of their crops due to natural disasters such as hail, drought, and floods.

“In our first year of testing the services, we could not provide wide coverage. Therefore, we are committed to expanding our services to thousands of acres. MRF has around ten thousand acres of contract farming. If they want to have crop insurance, we will accept the offer, but we need to provide the crops insurance as reinsurance because of its huge size. After reaching the agreement with MRF, we will negotiate with reinsurer. After that we will request permit from IBRB,” said U Soe Win Thant, Director of Global World Insurance, at the press conference “Micro Insurance & Liberalization” held at Bahosi Development’s office on March 12.

The company started providing crop insurance as pilot program in 2018 after acquiring for permission from Insurance Business Regulatory Board-IBRB in October 2016.

The term for crop insurance, for both rainy season rice and summer rice, is one year from the day of paying the premium. The premium is calculated based on the previous year’s selling and production rate. For example, K5,000 is calculated for an acre of rice with the presumed production rate of 50 tins per acre (1 tin = 46 lbs).

“We will pay the compensation based on base price set by government. If the base price is not set yet, we will set it to K500,000 per 100 tins. There is a great potential because we receive a lot of interest from farmers. We learn that lawmakers are discussing the idea of introducing crop insurance. Crops insurance has a lot of potential and the country needs this. We definitely need to do that,” U Soe Win Thant said.

In 2018, the company provided crops insurance service to around 300 acres of rice fields in five townships in Ayeyarwaddy Region, Yangon Region, and Mandalay Region but it did not have to pay any compensation for loss of crop.

The customers who buy crops insurance policy will get the compensation for the crop loss because of natural disasters such as flood, draught or storm. The compensation is only payable one time for the loss of rice. To continue the insurance coverage after a payout, the customer must pay the premium again.

(Myanmar Business Today: https://www.mmbiztoday.com/articles/global-world-insurance-working-crops-insurance-contract-farming )

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