To alleviate the impact of risks in agricultural activities, an insurance policy is all set to be rolled out for Omani farmers this week. “The first ever agricultural insurance policy in the Sultanate will be launched on Monday by Dr Fuad bin Jaafar al Sajwani, Minister of Agriculture and Fisheries”, said a spokesperson for the Capital Market Authority (CMA).
Vegetables, crops and green houses will be included in the first stage, while livestock and poultry will be covered in the second phase. Date palm and honey bees will be included in the final phase of the new agriculture insurance.
The decision to unveil the policy is the culmination of efforts by representatives from the Ministry of Agriculture and Fisheries, Oman Chamber of Commerce and Industry (OCCI), Oman Reinsurance Company and representatives from insurance companies under the chairmanship of CMA.
In August last, a committee including CMA executive president Abdullah Salim al Salmi, Ministry of Agriculture Under-Secretary Ahmed Naser al Bakry, and OCCI chairman Saeed Saleh Al Kiyumi held a meeting to review the initial draft policy.
“Apart from providing insurance coverage, the policy is another step to achieve more progress and stability for the agricultural and animal sector to enhance its contribution to the state GDP”, said Rashid bin Amer al Musalhi, a member of OCCI.
Agricultural Policy Team conducted introductory workshops and seminars for farmers across the Sultanate to explain the contents of the policy and the proposed underwriting mechanisms in a move to officially launch agricultural insurance products.
Romel Tabaja, Chief Executive Officer, Oman Reinsurance Company, said that farmers who buy the insurance will have kind of stability in income and minimal debts.
“Those who buy the insurance can claim compensation from insurers if anything happens to their investment in agriculture. And this can be reinvested”, he said.
The insured farmer will have better access to bank financing for their projects, he said.
According to the underwriting mechanism of the policy, there will be two insurance covers for vegetable crops and one cover for green
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 is going to insure the shortage in yield as a result of insured perils like natural catastrophe.
As for the green houses the insurance policy will cover its structure, essential equipment and the plastic cladding.
However, the implementation of the second and third phases depends on the success of the first phase.
Oman’s agriculture and fisheries sector registered a mammoth 16.3 per cent growth in 2016 against an average 6.4 per cent in the previous five years. The real GDP contribution from the sector also showed improvement during the recent years.
The relative share of the sector in the overall GDP improved to 2 per cent in 2016 compared to an average share of 1.3 per cent during the previous five years.