Global World Insurance Company presented crop insurance pilot project

Q: What is the pilot project of crop insurance?
A: The crop insurance system is designed to cover damages to crops due to erratic weather conditions in the country. The government gave the green light to carry out the pilot project of crop insurance on 31 January 2018. This permit is not meant for running a crop insurance business but for research and experimentation.
Q: How long does it take to conduct a pilot project for research? What are your further plans?
A: The pilot project will be undertaken for two years, covering the Yangon, Ayeyawady, Magway and Mandalay regions. If other regions and states also demand a pilot project, we will proceed to those areas. We will undertake the project first for paddy on an experimental basis rather than edible oil crops, industrial crops and garden crops.

Q: How did you come up with the crop insurance scheme?
A: Myanma Insurance was founded in 1952, providing 27 types of insurance. There is no insurance to cover the agricultural sector or crops. This will be a new challenge for the insurance industry. When we conceived this plan in 2016, a pensioner from Myanma Insurance, now working for our company, disagreed with it. However, I submitted a proposal despite the disagreement. Crop insurance will pay for any loss depending on the yield, according to the agreement made by both the parties. This means insurance will cover the loss if the yield is lower than the expected volume owing to erratic weather. Neighbouring countries such as India and Thailand have been providing a crop insurance system for farmers since 1970. We developed the crop insurance scheme for the benefits of the farmers.
Q: What were the challenges in designing a new crop insurance system?
A: As I said above, this new system lacks encouragement from the private and public sectors. Even the pilot project proposal that I had submitted in 2016 was approved only this year. The proposal was submitted to the parliament in June 2017. Another challenge is of setting the premium rate. There is no mathematician in the insurance sector in our country. This being so, we calculate the premium rate by referring to those in other countries. To set a premium rate, the sum insured (maximum amount payable) is calculated on the risk factor and the possible loss. The premium rate may vary depending on crop varieties, growing season and regions. So, we are conducting the pilot project. Some countries took 10 years just to conduct the research.
Q: Do you believe the pilot project will be successful?
A: I do. However, multi-stakeholders, including officials, the insurer, the insurance buyer and related organisations, must make concerted efforts to achieve this.
Q: When will you start this pilot project? What are the further plans?
A: The pilot project will begin during the upcoming paddy season. Also, the Pyithu Hluttaw Agriculture, Livestock and Rural Social Development Committee has urged us to implement this as soon as possible. We are planning to cooperate with related departments: Administrative Department, Agriculture Department, the Myanmar Agricultural Development Bank and the Meteorology and Hydrology Department. We will hold a meeting with related regional government officials. This project will be implemented by forming working committees. A systematic crop insurance system will emerge if those engaged in this sector work well together.

(Global New Light of Myanmar: http://www.globalnewlightofmyanmar.com/director-u-soe-win-thant-global-world-insurance-company-presents-crop-insurance-pilot-project/ )

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