The government will launch a pilot crop and livestock insurance scheme before implementing nationwide, said the secretary of Ministry of Agriculture and Livestock, Thinley Namgyel, during the Meet-the-Press session on June 28.

Acknowledging the scheme’s importance, he said that the discussion was underway regarding affordability for farmers and potential government subsidies.

The pilot phase would  target specific crops (paddy, maize, potatoes, and oranges) and livestock (cattle, pigs, and poultry), Thinley Namgyel said.

The insurance, he added, will consider not only climate-related losses but also losses caused from pests and diseases, among others.

“Initial discussions with the two insurance companies—Bhutan Insurance Limited and Royal Insurance Corporation of Bhutan Limited suggest a premium of 5.8 percent for crops and varying rates for livestock,” Thinley Namgyel said. “Cattle premiums would be 15 percent in the first year, reducing to 10 percent thereafter. Pigs and poultry would have a premium of 10 percent.”

He said the assumption was that not all farmers would participate. “Even with 50 percent participation, the annual premium would be Nu 2.8 billion if solely borne by farmers.”

He said that the government was exploring cost-sharing models, with options ranging from a 50-50 split with farmers. “In this scenario, the government will have to bear Nu 1.4 billion annually.”

Prime Minister Tshering Tobgay said that if the government was to pay 100 percent premium, Nu 2.8 billion was a significant sum considering the country’s current revenue. “A proper study and pilot project are crucial to ensure a scheme that benefits all stakeholders.”

He said that most of the crop loss and damage are mostly faced by low-income farmers who might struggle to afford premiums and the government would look into  how they can be included in the scheme.

Recently, the National Assembly passed the motion to establish a crop and livestock compensation trust fund.

During the Parliament session, Agriculture Minister Younten Phuntsho said that the government had developed an insurance scheme to be presented to the Parliament and substantial funds were allocated to the agriculture and livestock sectors in the 13th Plan.

He expressed concerns over the budgetary implications, stating that the proposed costs exceed current allocations.

The House directed the Ministry of Agriculture and Livestock to submit its implementation report in the next Parliament session.