Bangladesh: Agriculture Insurance Situation Analysis

Agriculture insurance provision in Bangladesh is very low:

• Several MFIs are offering micro-insurance products linked to credit including livestock-credit insurance, but in the absence of reinsurance agreements, these programs might not be able to cope with shocks that kill large numbers of animals. Some milk cooperatives and social enterprises, have indicated strong interest in developing livestock insurance products for their milk producers.

• The Ministry of Livestock and Fisheries and Department of Fisheries have identified a need to develop suitable aquaculture insurance products. Initial work is being focused on the shrimp
sector given its importance to farmers located in the southern coastal regions of Bangladesh and the high risk exposure to tropical cyclone damage and tidal surge.

• Crop insurance is not currently offered but two donor-supported initiatives are under implementation. On the supply side, there is a lack of knowledge and experience of the potential of
agricultural services by the insurance companies and thus a lack of technical expertise in the design, rating and implementation of agricultural crop, livestock and fisheries insurance products. Several decades ago the public insurer Sadharan Bima Corporation piloted small crop, livestock and aquaculture insurance programs, but these programs were terminated following poor underwriting results. Currently, there are two weather based crop index insurance initiatives under implementation: one is led by the government-owned insurance company Sadharan Bima Corporation, SBC, and supported by the Asian Development Bank, ADB, and the other is led by private-sector company Green Delta and supported by the World Bank Group.

• An innovative flood index insurance program has been piloted by Oxfam, an internationalNGO, for the past two years in selected villages in Sirajganj District. This fully subsidized indexinsurance program made claim payments to over 700 households in 2014 following severe floods in August and September 2014.