Players in the agriculture industry yesterday discussed the opportunities and challenges in creating a nationwide crop insurance scheme for small-scale farmers in a workshop that included the participation of the German development agency GIZ.
Attendees highlighted the need for cooperation among all industry players to implement the scheme, regulate the sector and raise awareness of the importance of insuring crops.
Speaking at the workshop, which was held in Phnom Penh, GIZ Cambodia senior advisor Claudius Bredehoeft said that to scale-up crop insurance for small-scale farmers there is a need to create a more enabling legal and regulatory environment while increasing data availability and accessibility.
He said the technical capacity of insurance and reinsurance companies, as well as the government and development partners, needs to be strengthened to enable the creation of a crop insurance scheme using RIICE technology.
RIICE Technology stands for ‘Remote Sensing-based Information and Insurance for Crops in Emerging Economies’. It is a public-private development partnership project to improve food security by supporting smallholder rice farmers in Southeast Asia through satellite technology and crop yield insurance.
Agriculture plays a key role in the country’s economy and in the fight against poverty, but it is the most vulnerable industry to natural disasters, Mr Bredehoeft said.
“Recently, natural disasters in Cambodia are notably caused by climate change and are a great concern, impacting economic and social development.
“Droughts, floods, and storms cost millions of dollars to the national budget annually to provide direct aid to the affected population and to restore damaged infrastructure.
“The risk and loss in the agriculture activities caused by climate change or natural disasters are beyond the control of the farmer which in many other countries is transferred to third parties through insurance schemes,” he said
Mr Bredehoeft said crop insurance schemes not only protect farmers, but increase food security as well. “Experiences from other countries show that the investment in agriculture is increasing when risk mitigation solutions are provided to the farmer,” Mr Bredehoeft added.
Crop insurance schemes are difficult to implement since they require the participation of a variety of players, said Chamroeurith Youk, managing director of Forte Insurance (Cambodia) Plc, adding that very few crop insurance projects are successful.
Since 2015, Forte Insurance has piloted a crop insurance project, benefiting 200 households in Battambang, Banteay Meanchey, Pursat, Siem Reap, and Kampong Thom.
Mr Youk said lack of cooperation among the different actors has proven a strong burden for the project. He said more government participation is required, adding that it will take at least three more years for the programme to run smoothly.