Thursday | 16 January 2025 | Reg No- 06
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Thursday | 16 January 2025 | Epaper

CRI emerging as a viable solution to protect our vulnerable farmers

Published : Friday, 25 October, 2024 at 12:00 AM  Count : 466
Shameul Islam Shovon
Sudhir Pramanik stared blankly at his flooded farmland, where the recent floods had washed away his Aman rice crop-his dreams for the season. Just weeks away from harvest, the sudden inundation left his fields waterlogged, and now he struggles to feed his family. Like Pramanik, thousands of farmers across Bangladesh faced similar devastation due to floods in August 2024, which impacted 11 districts and devastated agricultural production. The Ministry of Agriculture reported that 3.7 million hectares of farmland were affected, resulting in financial losses of BDT 3,346 crores. The floodwaters have receded, but the scars of agricultural damage remain, raising urgent questions about the future of food security in the country.

While Bangladesh has a fast and effective emergency response system, there is a gap in addressing the long-term needs of farmers post-disaster. Emergency support from government and humanitarian organizations typically focuses on immediate needs-food, drinking water, and one-time cash assistance-but fails to provide sustainable recovery options for farmers. Although some assistance in the form of seeds and fertilizers is offered, it often falls short of what is needed for real recovery.

In this context, Climate Risk Insurance (CRI) emerges as a viable solution to protect vulnerable farmers. With 85% of farmers in Bangladesh classified as marginal, many struggle to access loans from traditional banks, forcing them into high-interest loans from NGOs and non-conventional sources. This financial vulnerability exacerbates their struggles, making CRI a crucial tool to mitigate risks associated with climate change.

Bangladesh has experienced over 200 natural disasters since 1980, leading to an estimated $17 billion in damages, primarily in the agricultural sector. The country's agricultural GDP has been declining, now at 11.22%, down from over 17% in 2010. Given the substantial costs of disaster response, it is clear that one-time relief efforts are insufficient for long-term recovery.

While the government and the Ministry of Agriculture implement interventions post-disaster, these often benefit large-scale farmers at the expense of smaller producers. This was evident during the COVID-19 pandemic, where marginalized farmers received minimal support. Instead of relying solely on conventional relief mechanisms, CRI can supplement emergency aid by offering coverage against less severe weather events that traditional relief does not address.

Organizations like Oxfam have been pioneering CRI initiatives in Bangladesh, working with farmers to develop insurance products tailored to their needs. Since 2020, Oxfam has collaborated with the World Food Programme to implement index-based insurance solutions, incorporating farmers' perspectives into their design. These initiatives aim to ensure agricultural growth, food security, and income protection for vulnerable households affected by climate-related disasters. So far, Oxfam has supported 45,000 marginal and small-scale farmers in Kurigram, with plans to expand to other climate hotspots.

Under the CRI model, farmers can purchase insurance coverage to protect against various weather-related risks such as floods and droughts. Premiums range from BDT 50 to BDT 500, with the remainder subsidized by the project. Eligible farmers receive payouts directly via mobile banking, streamlining the recovery process. However, the sustainability of this model relies on maintaining subsidies; without them, premiums may rise, deterring participation among farmers.

For CRI to be effective nationwide, a long-term commitment from the government is essential. Although a pilot project launched in 2019 in Kishoreganj and Sunamganj has paused, a dedicated and active committee overseeing the initiative is critical. Engaging directly with farmers and establishing a permanent technical group, led by the Insurance Development and Regulatory Authority (IDRA) in collaboration with relevant ministries, can facilitate a more effective implementation of CRI.

Recent dialogue sessions organized by Oxfam have highlighted the need for comprehensive guidelines for CRI tailored to the marginal farming community. Recommendations include eliminating the 15% VAT on insurance products, strengthening insurance companies to ensure timely claim disbursements, and potentially creating a dedicated insurance company for CRI to streamline processes.

With projections from the United Nations indicating that Bangladesh will need to feed nearly 250 million people by 2050, nationalizing the Climate Risk Insurance initiative is vital for protecting farmers and ensuring food security. Prioritizing long-term solutions like CRI will empower farmers, making them more resilient to climate change and safeguarding the future of agriculture in Bangladesh.

The writer is a Campaign Officer; Oxfam in Bangladesh 



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