Government Slashes Subsidy on Agriculture and Livestock Insurance

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Government Slashes Subsidy on Agriculture and Livestock Insurance

July 20: The government has cut down the subsidy being provided for agriculture and livestock insurance. The government has reduced the subsidy for agriculture and livestock insurance by 25 percent in the budget announced for the current fiscal year.

The government had been providing 75 percent subsidy on such insurance premiums.  Earlier, the farmers were required to pay only 25 percent of insurance premium. However, the government will be providing only 50 percent subsidy on insurance premiums effective from the current fiscal year.

The Insurance Board has already directed insurance companies to implement the government's decision on agricultural insurance scheme. The board has recently issued a circular instructing non-life insurance companies to conduct agriculture and livestock insurance business accordingly.

Raju Raman Paudel, executive director of the Insurance Board, said that the decline in the subsidy for agriculture and livestock insurance is a positive thing. "Farmers should also practice paying insurance premiums since they are also self-employed people, '' he added.

Though the government has slashed insurance subsidies for agriculture and livestock, it has introduced a new provision to provide 50 percent subsidy in insurance premium for food storage. The government has also set a target of setting up 200 food storages at the local levels in the current fiscal year. Taking this into consideration, the government is providing 50 percent subsidy on the insurance premium for food storage.

Poudel said this is a new concept. "Though the government has reduced the subsidy for agricultural insurance, it has provided a 50 percent subsidy on the insurance of food storage so it has embraced the policy to encourage the agriculture sector.”

The Insurance Board had come up with an insurance program for agriculture sector in FY 2012/13. Since then, the government has been providing subsidies for such insurance every year.


 

 

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