Drought insurance spreads

The BAAC is also offering total loans of Bt15 billion to farmers who want to buy tractors, mills and other machine tools.
Rice farmers in four provinces – Buri Ram, Surin, Si Sa Ket and Ubon Ratchathani – will this year be able to buy insurance against drought from the BAAC, said the bank’s vice president, Boonchuay Chiadamrongchai.
Eligible farmers must be BAAC clients and their rice plantation must be 80 per cent of farm area.
The BAAC will charge premiums of 4.64 per cent of insured amount, and the minimum premium is Bt464 for protection for 92 days.
The protection period runs from July 1 to September 30. It will be divided into two periods, the first from July 1-31 and the second from August 1 to September 30.
Compensation would be paid to farmers if rainfall were not adequate. The compensation would be 10 per cent in the first period and 15 per cent in the second period in the event of a drought. The compensation would be up to 40 per cent of insured amount in case of severe drought.
The insurance scheme last year covered five provinces – Khon Kaen, Kalasin, Roi Et, Maha Sarakham and Nakhon Ratchasima – with 6,173 farmers participating and 35,775 rai (5,724 hectares) of rice fields being covered. The total premiums were Bt3.32 million and the combined insured amount Bt71.55 million.
Ninety farmers received compensation with a combined amount of Bt141,000 because of drought. The bank also paid a premium subsidy of Bt1.4 million to farmers who were not affected by the drought.
The BAAC yesterday signed a memorandum of understanding to support the insurance scheme with Sompo Japan Insurance (Thailand) Co.
Meanwhile Luck Wajananawat, president of the bank, said yesterday that it would provide loans totalling Bt15 billion to farmers who want to buy or lease tractors or other mechanical tools. The BAAC yesterday signed an MoU with Siam Kubota Co, manufacturer of farm-machine tools, to support the scheme.
Farmers can borrow money with a repayment period of eight years. The bank accepts both collateral and personal guarantees.
Farmers can borrow 80-100 per cent of the value of mechanical tools. They can also borrow funds to finance a leasing contract provided by Siam Kubota Leasing Co, or other leasing firms.