CP Foods extends insurance coverage to small farmers
CHAROEN POKPHAND Foods Plc (CPF) has announced that, as one of 87 farming contractors in Thailand, it had completed registration under the newly enacted Contract Farming Act.
It now vows to maintain a leadership role in the livestock industry through an insurance system for small-scale contract farmers that the company said is the first of its kind.
The registration and insurance would support the agricultural sector and enhance the economic sustainability of the company’s more than 5,000 contract farmers, said Narong Jiemjaibunjong, CPF’s senior vice president. All farming contractors are now required to register with the Agriculture and Agricultural Cooperatives Ministry.
Narong noted that 5,960 contractees under CPF’s contract farming operations are engaged in chicken and swine farming. Sixty per cent of them have been doing business with CPF for over 10 years.
CPF claimed to be the first livestock company to set a goal to manage risks for income-guaranteed small-scale farmers who sell their entire output to the company.
Risk insurance will help add confidence, stability and sustainability, said CPF, and so they will extend their current scheme to cover farm structures and equipment in times of disasters to the properties belonging to farmers.
Farmers operating with loans are normally required to insure their structures and equipment for eight years, but most of them do not extend the insurance after the loans are paid off and thereby take on personal risk.
CPF would shoulder this risk on the farmers’ behalf to ensure their own supply stability, Narong said.
The insurance scheme will not cover large-scale farmers, who already enjoy a price guarantee.
These farmers, registered as business enterprises, earn high income and are able to shoulder their own risks.
