Agriculture Insurance Scheme Will Soon Be Available

A solution to protect farmers’ crops assets is currently under way. The Ministry of Agriculture, Food and Agriculture Organisation and Fiji Crop and Livestock Council are working on developing an agriculture
09 Dec 2017 11:00
Agriculture Insurance Scheme Will Soon Be Available
Fiji Crop and Livestock Council chairman Simon Cole presenting at a workshop. Photo: Fiji Crop and Livestock Council

A solution to protect farmers’ crops assets is currently under way.

The Ministry of Agriculture, Food and Agriculture Organisation and Fiji Crop and Livestock Council are working on developing an agriculture insurance scheme.

Fiji Crop and Livestock Council chairman Simon Cole said the agriculture insurance scheme, like other types of insurances available, does not make money for them.

“It is only to cover major disasters or catastrophes.

“It removes the volatility, meaning that  after a major disaster, the farmer can get something quickly to help them get their crops back into the ground,” he said.

Traditionally, providing insurance for the farmer’s crops on the ground is difficult, explained Mr Cole.

However, with successful mechanisms in place in the Caribbean and India, the trio with their other partners are working together to introduce it in Fiji.

The scheme is not similar to the conventional insurance but is rather an Index Linked Parametric Insurance.

This means that the farmer can receive compensation if their crops are damaged by heavy winds, cyclone, flood or drought.


Aim of insurance

“The aim of the insurance is to put money in the hands of the farmers.

“If we are successful and if we can prove to the insurance markets that we have the data and if the farmers are keen to push this forward then we think that we can have the product available in six months to one year’s time,” he said.


How it all started

The scheme began in 2014 when the United Nations Foods and Agriculture Organisation did a preliminary study on the agriculture sector in our country.

The FAO wanted an insurance that goes straight to the farmer and insures the farmer’s biological assets.

So earlier this year, the FAO had approached the Council to develop the preliminary study into a product that can be sold to our farmers.  Mr Cole said this has been one of the Council’s main focuses this year.

The Council has been working with the Insurance Holdings Limited, Nadraki Weather and the Fiji Meteorological Office.


Achievement so far

“We know how we want to do it.

“We are able to include all crops, whether the farmer is growing tomatoes, ginger, dalo and so on, it can all be covered under the same scheme,” he said.

A scheme for sugarcane farmers is currently being discussed, he added.

The Government had announced in the National Budget 2018 that they will support the development of this product which the Council is pleased to know, says Mr Cole.



The Council is currently discussing with international insurance companies such as Willis Towers Watson in London and another global  insurance company in Singapore.

“These are the big companies that place this insurance into the market and they only place it in the market if we have available all the information they need to calculate the risk and value of the risk.

“This is a huge number crunching exercise but I am confident that we do have this information with the support to Ministry of Agriculture, Fiji Meteorological Office and Bureau of Statistics.

“We have this information available but we have to present this to the big companies to say that they can sell this product along with the costs provided to them,” he said.

Questions such as how often does our country have big cyclones or how can we prove that we often have cyclones or serious floods or droughts. These are the main requirements for big insurance companies in the international arena to be able to sell the product in the country.

“Proving all these is important because we cannot cover every single small flood or cyclone. It has got to be the big events.

“We have to prove that and that is why we are relying on the meteorological service to provide the historic data for analysis and to be the competent authority to declare that a trigger event has happened,” he said.


Importance of the weather office’s role

For the study to become a product, the weather office has to prove to the insurance markets that our weather data is strong enough to state the likelihood of a type of natural disaster that will hit our country, he said.



The premium is yet to be decided and it depends on how much will be insured.

Therefore if the farmer only wants to insure the major disasters, then the premium will be less.

“It will be very nice to insure every small event for every farmer in every part of the country but the reality is that this is very unaffordable.

“We have to be very careful how we choose what we insure and what we don’t insure,” he said.

Since it is difficult to balance the risks, a symposium will be held soon where the industry will meet the Government, Reserve Bank of Fiji and the insurance industry to discuss these issues.

Mr Cole said that Fiji is leading the region in scheme. He has been asked by the Technical Centre for Agricultural and Rural Cooperation (CTA) in Netherlands to look at six other countries in the region to see if they have the prerequisites for agriculture insurance.




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