Private firms may take on risk from catastrophe
The Finance Ministry has reaffirmed that the government will proceed with the rice pledging programme, while allowing private enterprises to insure rice production under the National Catastrophe Insurance Fund.
Areephong Poocha-um, permanent secretary of the ministry, said the government would allow private insurers to take on more risk from the fund because of less concern over flood disasters.
“The situation is back to normal. There is less worry over repeating floods. Many international insurance firms, such as from the United States, have shown high interest in taking on risk from the National Catastrophe Insurance Fund,” he said.
It has been alleged that the government does not have the capability to insure rice production under the pledging project because of the size of the budget required. However, the ministry has said the government will continue the pledging project, while allowing private firms to provide crop insurance.
Areephong also explained that insurance premiums should not be higher than Bt500 per rai (Bt3,125 per hectare).
The ministry will consult with the General Insurance Association and the Bank for Agriculture and Agricultural Cooperatives this week to determine the appropriate rate for insurance premiums for rice crops. Currently, the premium for 1 rai of rice plantation is Bt129.
Total premiums for rice-crop insurance amounted to Bt100 million last year, while claims were valued at Bt200 million. The BAAC has targeted getting about 1 million rai insured. However, only 800,000 rai of rice-plantation areas have got insurance, so the bank needs to find more clients to meet its target this year.
