Kingdom needs farm insurance, say experts

Experts have asked to introduce insurance for agricultural projects to avoid losses.
Agricultural project insurance is virtually absent in the Kingdom and does not exceed 10 percent of the total operating projects in the country.
Abdullah Al-Rubaiaan, chairman of Board of Directors of the Agricultural Development Fund, said the fund will begin taking major steps toward implementing cooperative insurance in the poultry sector, to be followed in the fisheries sector.
A study is under way to determine whether to establish an agriculture cooperative insurance company.
Al-Rubaiaan said that the Agricultural Development Fund seeks to start an insurance enterprise in the poultry industry in order to cope with diseases and epidemics. The insurance will help these projects by providing compensation for the damages that investors are exposed to resulting from the losses that occur due to such diseases and epidemics.
He added that insurance can reduce the impact of losses and also help raise biosecurity at these enterprises by cross-linking compensation entitlement and abiding by certain control and requirement measures.
Insurance expert Maher Aldjaari noted that agricultural insurance varies from one country to another. He said there are some countries that have adopted the compulsory method that makes it mandatory for all individuals to join the scheme, while other nations have adopted the optional method of insurance, where it is left to individuals to decide on their participation.
He said that countries that apply agricultural insurance differ on the quality of crops and the risks covered by the applicable insurance system. Most countries apply the insurance to one crop only, and then expand it to other crops.
Aldjaari said the proportion of insurance in agricultural projects in Saudi Arabia does not exceed 10 percent and is applied by local insurance companies. If a project is large, local insurance companies apply re-insurance through international re-insurance companies outside the Kingdom.
He stressed the importance of taking into account the economic conditions farmers face when deciding on the annual installment to be propotional with the size of agricultural projects. The compensation should be commensurate with the size of the damage and should be granted as soon as possible and away from the routine complexities that delay obtaining compensation.
Insurance expert Musa Rubaiaan said agricultural insurance is virtually missing in Saudi Arabia, and only a small percentage of large companies are insured. He said it is important for the government to contribute to the insurance of agricultural projects by making insurance a requirement to obtain loans from the Agricultural Development Fund.
He stressed that insurance fluctuations occur in the market. “Insurance acts as a rescuer, helper, and supporter which represents an essential strategy for the protection of agricultural investments in the Kingdom.”
The rain and floods that occurred in a number of regions of the Kingdom this year have caused considerable damage to agricultural projects.
The General Directorate of Civil Defense announced earlier that more than 15,431 farms were affected by flooding, including more than 6,312 farms in Asir, 3,684 farms in the cities and provinces of Riyadh region; and more than 4,655 farms in each of Qassim, Hail, Makkah and Jazan. He added that 266 camels and more than 23,987 sheep were killed in flooding.
No damage was reported to farms in areas of Al-Jouf, the northern border and Tabuk.