MUSCAT, Oct 23 - The first-ever Agricultural Insurance Policy in Oman was launched under the auspices of Dr Fuad bin Jaafar al Sajwani, Minister of Agriculture and Fisheries on Monday.
An honorary signature was made by the minister on an insurance document in this regard at an event organised by Capital Market Authority (CMA).
“In the beginning, the policy will mainly cover agriculture crops — production loss and market prices,” said Abdullah bin Salim al Salmi, Executive President of CMA.
Talking to mediapersons on the sidelines of the event, Al Salmi said that the underwriting mechanism of the policy was finalised after several meetings with representatives from different sectors of the economy.
“The policy will be available to Omani farmers from tomorrow (Tuesday)”, he told the Observer.
Like many other developing countries, Al Salmi said, farmers in the Sultanate too need insurance to cover the risks posed by natural calamities like floods, drought, threat from fire, locust attacks and other plant diseases.
“Majority of the farm holdings in Oman are small. Many of them are not commercially developed and managed. This is one of the
problems in providing insurance cover,” he said.
The event was organised in cooperation with Omani Reinsurance Company (OmanRe), in the presence of a number of distinguished guests and representatives from insurance companies and farming community.
In his opening address, Ahmed Bin Ali Al Ma’amari, Vice President of the Insurance Sector, said that the policy will help the agriculture sector increase its contribution to the state GDP.
“The policy will further develop the agricultural sector by creating a greater sense of stability and reassurance of those working in this sector and would reduce the reliance on government compensation in the event of disasters,” he said.
A working group with members from the Ministry of Agriculture and Fisheries, the CMA, the Oman Chamber of Commerce and Industry and Omani Society of Insurance Companies, have done extensive studies on various aspects relating to agriculture insurance, he said.
Omani Reinsurance Company (OmanRe) was commissioned to adopt the agricultural insurance product in the Sultanate by providing the appropriate insurance coverage, in addition to external reinsurance requirements.
According to Romel Tabaja, Chief Executive Officer, OmanRe, there will be two insurance covers for vegetable crops and one cover for green houses.
For vegetable crops, the first cover will be to insure the cost of production i.e. the sum insured will be the average cost for the plantation of crop.
The second cover for vegetable crops will be an insurance to cover the shortage in yield as a result of insured perils like natural catastrophe and this what we call the market value basis cover.
As for the green houses the insurance policy will cover its structure, essential equipment and the plastic cladding.
In the next stage, agricultural, fisheries and animal sectors will be covered under the policy.
Meanwhile, Ali Abdul Azim, who made a presentation on the options for insuring vegetables and other technical aspects related to the method of calculating the cost of insurance, pointed out that the minimum insurance for any vegetable insurance policy is RO 75.
The number of companies providing services in the market are four insurance companies including three traditional insurance companies and one Takaful insurance company.
The presentation included the supply of vegetables to be insured, namely eggplant, pepper, potatoes, cucumber, tomatoes, melons, watermelon, cauliflower, cabbage, onions, carrots, garlic, radishes and okra.
SAMUEL KUTTY
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