Friday, July 4, 2008

Risky Jamaican farming under probe - World Bank assessing feasibility of agri insurance scheme

(Jamaican Gleaner) Work is beginning in Jamaica to find ways of specifically broadening to the agricultural sector a World Bank-facilitated disaster insurance scheme, which farmers say does not adequately address their needs.

In fact, the World Bank offices here is drafting the terms of reference for consulting firms, which will be invited to bid for the job of doing the preliminary studies that will

ultimately help to inform both the authorities and potential insurers on assessing climate risks for agriculture.

Climate risk map

"The study will produce a climate risk map of the agriculture sector of Jamaica, identifying the different production areas, typology of producers, risks per crop and per region," Badrul Hague, the World Bank representative in Kingston of the soon-to-be-commissioned pre-feasibility analysis.

"It will identify the potential areas for commercial agriculture insurance products as well as the areas where public investments and emergency coverage is required for small vulnerable farmers," Hague said.

Jamaica, whose agricultural sector has been badly hit by hurricanes and their related floods in recent years, is a member of Caribbean Catastrophe Risk Insurance Facility (CCRIF), the World Bank-promoted scheme launched in the face of Jamaica's lobby after a string of hurricane battering earlier in the decade.

Annual 'premiums'

Participating countries pay annual 'premiums' to the scheme and can draw compensation if they are hit by hurricanes and earthquakes.

But critics say that the scheme is too restrictive in structure and farm sector lobbyists complain that it does not specifically apply to agriculture. Governments decide how compensation funds are used.

Indeed, after winds and floods associated with Hurricane Dean last year wiped out three-quarters of the island's vegetable production and left estimated damage of $9 billion to the farm sector as a whole, the Jamaica Agricultural Society proposed a self-insurance fund, contributed to by the government, multinational institutions and farmers. There was a similar proposal for coffee farmers when their industry was devastated by Hurricane Ivan in 2004.

Concerns

Farmers' concerns about the dangers of hurricanes are likely to be peaked at this time of the year, with the start, on June 1, of the official five-month storm season.

However, while the Jamaican Government has advanced recovery cash to coffee growers ahead of crop insurance payouts and subsidised premium payments to export banana farmers after last year's storm, the broad self-insurance scheme suggested by Grant appears not to have had firm traction.

The widening of the CCRIF initiative - and not just for Jamaica - appears to be firmly on the agenda.

But CCRIF officials warn that even if a programme was fast-tracked, it would be some time for an insurance scheme for the agricultural sector to be designed and put in place.

"Bearing in mind the complexity of the challenge, we do not envisage having anything in place before next year at the earliest," said a CCRIF spokesperson.

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