IMPORTANCE OF CROP INSURANCE - STATUS (Pt 1)

MALAYSIA will offer government-backed insurance plans to help compensate farmers for losses after natural disasters and considered as part of measures to strengthen food security. A scheme known as Agro-Food Takaful Insurance Scheme will be launched through the agriculture and food industries ministry and will initially be offered to 189,500 rice farmers.  The insurance cover will be expanded in stages to other sectors, including fisheries was launched in 2022 during the Malaysian Agriculture, Horticulture and Agro Tourism Exhibition at MAEPS Serdang. Malaysia as a net food importer is taking steps to enhance domestic supplies of grains and poultry as nations around the world battle rising food costs amid disruptions caused by Russia’s invasion of Ukraine. Malaysia remains among countries without crop insurance, unlike its neighbours including China and Indonesia. There are issues related to agriculture insurance in Malaysia. There are six types of agricultural insurance, namely, greenhouse, crop, aquaculture, plantation, poultry, and livestock. Agriculture insurance aims to reduce the financial losses of the farmers due to the destruction or damage of crops caused by different risks of production [50]. Forest crops (timber, paper, and pulp for commercial use) and trees used in industries (tea, coffee, rubber, and palm oil) are insured by the forestry or plantation insurance. Various domestic animals like horses. Both primary and secondary data were used for this study. A questionnaire survey was the main instrument for the primary source of data collection, while secondary sources were based on a detailed literature review. For the socio-demographic characteristics of the respondents the farmers help to improve their performance in adopting practices that manage disaster risks. They help to increase the entrepreneurial abilities of farmers in their decision process for managing the disaster risks, especially those relating to the agricultural enterprise system. Based on this rationale, the relevant socio-demographic characteristics of the respondents were investigated to determine how they affect the willingness of the farmers. This article in "Anim Agriculture Technology" I wrote about the importance of crop insurance in Malaysia.

There are several challenges confronted by insurance companies in Malaysia as first Lack of Experience in international practices in which the insurance companies in Malaysia have minimal exposure to international practices in agricultural insurance. They lack knowledge and experience in product design, selling, rating and implementation of some agriculture insurance. The second challenges were Limited Agricultural Insurance Products in which the insurance companies in Malaysia are offering limited insurance products for crops. The study explored the potential effects of agriculture insurance for Disaster Risk Reduction (DRR) because of unplanned urbanization, persistent poverty, and ecosystem degradation. The disaster risk reduction by financial strategies may play an important role in disaster risk reduction. Secondly, this study discussed the existing lack of experience to have a better financial mechanism and limited. For me Malaysia is one of the countries in the Asia-Pacific region that is most vulnerable to hazards such as floods, landslides, droughts, and climate change. Disaster risk continues to grow as a result of unplanned urbanization, persistent poverty, and ecosystem degradation. In this context, insurance is a risk financing mechanism and it was part of a comprehensive disaster risk management strategy, which plays an important role in disaster risk reduction. Being an economy in transition, Malaysia is in a unique position in relation to agriculture insurance. Based on primary and secondary sources of information and literature review, the present study analyzed the potential effects of agriculture insurance for disaster risk reduction (DRR) in Malaysia. The proposed framework of agriculture insurance suggests the involvement of policy makers and implementers, marketing channels, and micro users for DRR in Malaysia. The study identified challenges for agriculture insurance in Malaysia, such as lack of experience from international practices, limited products, lack of necessary data, limited financial capacity, and high administrative operational costs. For that the suitable recommendations that aim to promote agriculture insurance and reduce disaster risk in agro-production are offered. These recommendations emphasize proper government initiatives and public-private partnership of insurance companies to assist the market and the designing of suitable insurance products. This article divided in two 92) segment that is Part 1 ad Part 2 respectively. Thanks....

By,

M Anem,

Putrajaya,

Malaysia.

(January 2024).