The Bhutanese Leading the way.
In a move aimed at providing security and stability to the agricultural sector, the Ministry of Agriculture and Livestock (MoAL) has laid out a comprehensive proposal for a national crop and livestock insurance scheme, set for a pilot rollout in July 2025, pending Cabinet approval.
The proposal, which has been developed in close consultation with Bhutanese insurance companies, now awaits financial review from the Ministry of Finance (MoF) on the budget and premium structure.
Once finalized, the scheme will represent a significant shift from the traditional reliance on compensation trust funds, offering farmers a sustainable safety net against natural calamities, pests, and wildlife-related losses.
An official from MoAL said, “The current proposal on insurance scheme covers paddy, maize, orange and potato for crops and cattle, piggery and poultry for livestock. These commodities were prioritized by the ministry to pilot the scheme, and if it receives good acceptance and buy-in by the farmers, more crop and livestock commodities will be covered in the future leaving the options open for farmer’s own interest to insure specific products.”
Affordability remains a top concern for MoAL, as it collaborates with MoF to ensure the scheme is accessible to farmers across Bhutan. MoAL closely consulted with MoF regarding the cost implication of the scheme to the government.
The official said, “The ministry developed the proposal taking into consideration the farmer’s affordability, government’s scarce resource and sustainability of the scheme. The scheme is proposed to be piloted with government’s subsidy support in paying a certain share of the premium rates. However, the percent share of the government as subsidy to pay the premium is not decided, and we have consulted MoF for the expert views and guidance on the same.”
With no specific eligibility criteria in place, the insurance scheme aims to be inclusive, available to all interested farmers who wish to mitigate risks associated with natural disasters, pest infestations, and wildlife conflicts.
“The scheme will be open to all farmers who desire to de-risk their investments, with no specific requirements, emphasizing that the coverage includes climate impacts and human-wildlife conflicts,” said the official.
In the event of a loss, the claim process has been designed to be efficient and fair, with payouts triggered when damages exceed a 5 percent franchise limit for crops. For livestock, compensation will be calculated based on the market value of the animal if death occurs. The ministry intends to fully educate farmers about the details of the claim process, ensuring they understand when and how to file claims.
“The claim process, at times of loss and damage, will be guided by and evaluated as per the insured agreement,” said the official.
Recognizing the importance of farmer education, MoAL has outlined plans for a thorough awareness campaign to help farmers understand the scheme and its benefits. “If everything gets through, the ministry has the plan to sensitize and create awareness to the farmers regarding the scheme,” the official from MoAL confirmed.
If the pilot proves successful, the ministry hopes to expand the insurance scheme nationwide, eventually transitioning into a commercially sustainable model, where government subsidies may gradually phase out.
Officials view this transition as essential to enhancing agricultural productivity and driving economic growth in Bhutan. “If farmers’ acceptance and interests are high, the ministry shall expand the scheme into a full-fledged commercial insurance scheme,” the official said, noting that the ultimate goal is a sustainable and scalable insurance program with significant economic benefits for the nation.
