An insurance policy for the agricultural sector launched by the Capital Market Authority (CMA) on Monday will be extended later to cover the livestock and fisheries sectors as well. The agricultural insurance policy, which now covers mainly the risks of farmers, who cultivate vegetables and fruits, was launched at a function organised under the auspices of Dr. Fuad bin Jaffer bin Mohammed Al Sajwani, minister of Agriculture and Fisheries on Monday.
The whole scheme will be implemented in three phases and the policy will be extended to cover the livestock, bee-keeping, date cultivation, poultry and fisheries sectors at a later stage. Four insurance companies—National Life and General Insurance, Dhofar Insurance, Al Madina Takaful and Arabia Falcon Insurance Company—are offering insurance cover for farmers and the insurance schemes are reinsured with Oman Reinsurance (Oman Re). “The farmers can insure the cost (of farming) or market price,” said Abdullah bin Salem Al Salmi, executive president of CMA, who was talking to journalists after the launch function.
The minimum insurance for any agricultural insurance policy is OMR75. All major risks associated with cultivation, including natural fire and lightning, flood, landslide storm, hailstorm, cyclone, typhoon, tempest and hurricane are covered under the scheme. Further, damage due to pests is covered only when it affects a large area. Also, losses to farmers due to drought and areas frequently affected by strong winds are not covered under the scheme. “The significance of the agricultural sector in the economy has increased in recent years. Many local people are investing in the agricultural sector and they need this kind of coverage,” said Ahmed Ali Al Mamari, vice president (insurance sector), at CMA.
He further said vegetable and fruit production in Oman is expanding as per statistics released by the Ministry of Agriculture and Fisheries. Oman has two types of farmers—full time farmers and part-time farmers—explained Al Mamari. The new technology in farming is going to help farmers expand cultivation. “That is why we need funding for agricultural cultivation and insurance cover for farmers. This will make it easy for farmers to get finance from banks,” added Al Mamari. Al Salmi said the Ministry of Agriculture and Fisheries and insurance companies have to create awareness about the insurance scheme among farmers in different parts of the country. Earlier, awareness seminars were held across the Sultanate, where teams met farmers and held workshops to educate them on the concept and philosophy of agricultural insurance. “This will take some time, but there is a potential.” The CMA chief also said that most of the farmers in Oman have small farms or a plot of land, which are privately owned.
Officials from CMA, the Ministry of Agriculture and Fisheries, the Oman Chamber of Commerce and Industry, Oman Reinsurance Company and insurance firms attended the launch event. Al Mamari noted that a working group was formed to study the possibility introducing agricultural insurance policy in the Sultanate, which included representatives from CMA, the Ministry of Agriculture and Fisheries, the Oman Chamber of Commerce and Industry, and Oman Re-insurance Company. The team started its work from August 28, 2016 to conduct a feasibility study on agricultural insurance and the possibility of insurance companies to market it as an insurance product. The team also studied the nature of risk to be covered.