CROP INSURANCE - STATUS IN MALAYSIA

HOW IS THE IMPLEMENTATION OF THE crop insurance scheme in Malaysia. Actually, reported that the Malaysian government will soon be offering crop insurance policies to compensate farmers for losses incurred as a result of natural disasters. This initiative is part of the government's efforts to enhance food security. According to the National Agrofood Policy 2021-2030 (NAP 2.0) is formulated with the vision of developing a sustainable, resilient, and high-technology agrofood sector in efforts to drive economic growth, enhance the well-being of the people, and prioritize food and nutrition security. Following the Standard Reinsurance Agreement (SRA) and the Livestock Price Reinsurance Agreement (LPRA) are cooperative financial assistance agreements between the Federal Crop Insurance Corporation (FCIC) and an insurance company. Started in Mac 2024 the takaful scheme is a long-term measure to assist farmers suffering losses caused by plant diseases and pest attacks. It was reported that the takaful scheme offers a higher amount of compensation of up to RM3,000 per hectare per season compared to RM1,800 per hectare per season under TBTP. As the development of the rice industry requires the formulation of a new policy involving six aspects, including providing subsidies for padi cultivation based on productivity rather than on the basis of rice field area. This latest article in "Anim Agriculture Technology" blog I share my knowledge about crop insurance implementation status in Malaysia.

According to my contacts at Universiti Putra Malaysia's agricultural economics expert known as Prof Datuk Dr. M Nasir Shamsudin, suggested that the government should consider floating the price of local white rice, implementing targeted rice subsidies, introducing crop insurance and early warning systems, and adopting a flexible floor price based on the Producer Price Index (PPI). He said that these six policy changes, with the integration of technology and the determination of farmer-entrepreneurs, have the potential to transform the landscape of the country's rice industry development to achieve a 100 per cent self-sufficiency level (SSL). Today our production policies need to be rationalised. Subsidies for padi cultivation, such as fertilisers and seeds, should be implemented based on productivity to further enhance the motivation of farmers in increasing their respective outputs. The government is currently practising price ceilings and floor price for rice...the retail price of local rice should be floated according to market prices. When it was floated, the government should implement targeted subsidies for rice to the B40 group, using methods such as cash transfers credited to their identification cards for rice purchases. The government should focus on developing the rice industry in the country to make it a profitable industry resulting in the country to be more self-reliant. Today the floor price for padi is currently set at RM1,200 per metric tonne, and it should ideally be "linked" to the Producer Price Index (PPI) to align with the increase in input costs. This is because many farmers incur increased input costs such as fertilisers but the floor price remains the same.

Media reported that in the next 2024 Budget presentation very soon that many party hope that the government can introduce crop insurance to ensure that farmers are not adversely affected in the event of incidents that damage crops that was similar to what exists in the United States. However to start with that the implementation of crop insurance could possibly be offered by government agencies such as the Farmers' Organisation Authority or Agrobank. The government also needs to establish an early warning system that can predict our rice production for a specific period to ensure our supply is always sufficient. According to an expert from Universiti Kebangsaan Malaysia's agricultural expert known as Dr. Noraziyah Abd Aziz Shamsudin that she suggested the government could explore the potential of cultivating rice to five times over in two years by ensuring the use of more early-maturing varieties to strengthen the domestic rice industry. That its impact on soil quality needs to be emphasised, along with addressing issues related to machinery that may damage soil structure, its effects on water quality, the health of farmers, and the use of agricultural chemical inputs. An idea of the development of more new rice varieties especially those that are early-maturing and resistant to abiotic stress factors such as drought, floods, heat, salinity and biotic stress factors like pests and diseases. This can be achieved by providing specific research funding to rice researchers, particularly those specialising in breeding and agronomy. Suggested also the government recommend several rice varieties based on the suitability of the rice planting location, which is beneficial for adjusting fertiliser requirements to minimise input. There should campaign to encourage farmers to plant a particular variety for a maximum of three seasons and then switch to another variety. They can return to the previous variety after a few seasons to reduce disease and pest attacks. Proposal of  the establishment of special areas for low-input and sustainable rice production systems can also be implemented.

Thanks.

By,

M Anem,

Senior Agronomist Expert,

Melaka,

Malaysia.

(September 2024).