Flood damage insurance payout gins up interest in microinsurance says RADA

Farmers Embrace Crop Insurance After Recent Rains

Winston Simpson, CEO of the Rural Agricultural Development Authority, RADA, reports that farmers who were initially skeptical about crop insurance have become more optimistic since receiving payments from their insurer to cover flood damage caused by recent rains.

Impact of Tropical Cyclone

The worst-hit areas from the tropical cyclone were Kingston, St Andrew, St Catherine, and St Thomas, according to the Ministry of Agriculture, Fisheries and Mining.

The damage caused by the cyclone resulted in the loss of 410 hectares of crops, including vegetables, fruits, and condiments. Livestock losses included 160,500 broilers, 1,460 layers, 70 pigs, 34 sheep, and 47 goats. Additionally, there was significant damage to infrastructure and irrigation systems that farmers rely on.

Positive Response to Crop Insurance

Winston Simpson stated in an interview on December 19 that since the payout began, he has received numerous calls from farmers who were not initially enrolled in the insurance program. He encourages them to sign up and take advantage of the benefits. Simpson emphasizes that insurance, like many other things, requires buy-in from farmers.

The microinsurance product for farmers is offered by GK General Insurance, according to Simpson.

General Manager of GK General Insurance, Chaluk Richards, confirmed that the insurer made payments totaling $875,000 to 27 farmers for the damage caused by the November rains. This amount is just a fraction of the estimated $274 million agricultural fallout reported by Minister of Agriculture Floyd Green.

GK Microinsurance Policy

The GK microinsurance policy is offered in partnership with the Ministry of Agriculture, with RADA being a portfolio agency. The insurance product was packaged based on ecological zones and weather patterns, providing coverage for drought, flooding, and hurricanes.

The Ministry of Agriculture subsidized a portion of the premium for enrolled farmers. The coverage options include protection against drought and flooding, depending on the package purchased.

Simpson expressed optimism about the future of crop insurance, stating that he expects more farmers to sign up in 2024. He believes that insurance is a valuable asset for farming and that larger investors who understand risk are also seeking insurance coverage. Depending on the package, farmers can receive coverage of up to one million dollars.

GK Weather Protect Parametric Policy

GK General reported that the farmers who received insurance payouts under their GK Weather Protect parametric policy were located in Clarendon, Manchester, and St Elizabeth parishes. The company aims to reach out to the entire farming community, including the 231,000 registered farmers with RADA.

Payouts under the policy are based on a weather index, specifically excess rainfall and high wind speed measured in each parish. Once a trigger value is reached, payment is automatically triggered. This parametric approach eliminates the need for loss assessments, resulting in faster payouts compared to non-parametric insurance coverage.

Farmers and fishers can choose coverage for individual perils such as rainfall, drought, or hurricane winds, or combine them for comprehensive protection. The GK Weather Protect policy offers customizable limits with coverage options ranging from $50,000 to $1 million. Policies are available for two distinct seasons, allowing for targeted protection based on local weather patterns and specific needs.

Other Insurers and Market Potential

Winston Simpson anticipates that other insurers will enter the market with more products tailored to the agriculture sector. He mentioned that companies from as far away as Europe have been contacting him for information on the market. With 250,000 registered farmers in Jamaica, Simpson believes that the agriculture insurance market has significant potential.

Advantage General Insurance Company has already developed a product covering cars, equipment, vessels, and accessories for fisherfolk. Sagicor Life Jamaica has also introduced a microinsurance line for farmers providing life coverage.

Simpson emphasized the importance of land ownership or lease for farmers to qualify for relief or incentives. The land being farmed must be at least five acres under production to access product input, motor vehicle, or tax incentive relief. Backyard farmers and hobbyists may receive assistance but will not be registered as producers and therefore will not benefit from incentives.

Contact: avia.collinder@gleanerjm.com

SDGs, Targets, and Indicators in the Article

1. Sustainable Development Goal: No Poverty (SDG 1)

– Target 1.5: By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social, and environmental shocks and disasters.
– Indicator 1.5.2: Direct economic loss attributed to disasters in relation to global gross domestic product (GDP).

2. Sustainable Development Goal: Zero Hunger (SDG 2)

– Target 2.4: By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding, and other disasters, and that progressively improve land and soil quality.
– Indicator 2.4.1: Proportion of agricultural area under productive and sustainable agriculture.

3. Sustainable Development Goal: Climate Action (SDG 13)

– Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
– Indicator 13.1.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.

4. Sustainable Development Goal: Partnerships for the Goals (SDG 17)

– Target 17.17: Encourage and promote effective public, public-private, and civil society partnerships, building on the experience and resourcing strategies of partnerships.
– Indicator 17.17.1: Amount of United States dollars committed to public-private partnerships.

Table: SDGs, Targets, and Indicators

Analysis and Explanation

1. The issues highlighted in the article are related to the impact of tropical cyclones on farmers, crop and livestock losses, infrastructure damage, and the need for insurance coverage. These issues are connected to the following SDGs:
– SDG 1: No Poverty – The article discusses the economic losses faced by farmers due to extreme weather events and the need to build resilience among the poor and vulnerable.
– SDG 2: Zero Hunger – The article mentions the loss of crops and livestock, highlighting the importance of sustainable food production systems and resilient agricultural practices.
– SDG 13: Climate Action – The article emphasizes the need to strengthen resilience and adaptive capacity to climate-related hazards and natural disasters.
– SDG 17: Partnerships for the Goals – The article mentions partnerships between insurance companies, the Ministry of Agriculture, and RADA to provide insurance coverage for farmers.

2. Based on the article’s content, the specific targets under the identified SDGs are:
– Target 1.5: Build resilience of the poor and those in vulnerable situations.
– Target 2.4: Ensure sustainable food production systems and implement resilient agricultural practices.
– Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters.
– Target 17.17: Encourage and promote effective public-private partnerships.

3. The indicators mentioned or implied in the article that can be used to measure progress towards the identified targets are:
– Indicator 1.5.2: Direct economic loss attributed to disasters in relation to global GDP – This indicator can measure the economic impact of extreme weather events on farmers and assess the effectiveness of insurance coverage in reducing poverty.
– Indicator 2.4.1: Proportion of agricultural area under productive and sustainable agriculture – This indicator can measure the adoption of resilient agricultural practices and assess the progress towards sustainable food production systems.
– Indicator 13.1.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population – This indicator can measure the impact of climate-related hazards on human lives and assess the effectiveness of resilience-building measures.
– Indicator 17.17.1: Amount of United States dollars committed to public-private partnerships – This indicator can measure the level of investment and collaboration in public-private partnerships aimed at addressing the challenges faced by farmers and promoting sustainable agriculture.

Overall, the article highlights the importance of addressing the impacts of extreme weather events on farmers, promoting sustainable agriculture, and strengthening resilience to climate-related hazards. The mentioned insurance coverage and partnerships contribute to achieving the identified SDGs and targets.

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: jamaica-gleaner.com

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