The Cambodian Agriculture Cooperative Insurance Company (CACIC), an initiative established by the Cambodia Center for Study and Development in Agriculture (CEDAC), yesterday announced the start of an agriculture micro insurance service to help rice farmers better respond to climate change.
Farmers who become a member of CACIC will have to pay an insurance fee of around $10 per hectare each season, although this cost will vary slightly depending on the type of rice variety gown.
In return, they receive consultation on farming techniques, climate change resilience methods and will get an insurance payout when their crop is damaged either by flood or drought, according to Yang Saing Koma, president of CEDAC.
“Farmers now face challenges of unpredictable floods and drought from climate change.
There has never been an insurance system for small-hold farmers to restore plantations from the disaster, which forces them to take loans from finance institutions with high interest rates,” he said.
“The insurance will be a reserved fund for farmers.
It will help reduce the cases where farmers sell their land to pay back high interest rate loans, migrate for work abroad and [help to] become a professional or commercial farmers to [ensure more] sustainable farming.”
CACIC was founded with $96,000 in funding from the Netherlands’ Achmea Foundation.
The initiative will be implemented by CEDAC in five target provinces including Takeo, Kampot, Kampong Chnang, Prey Veng and Kampong Speu, before expanding nationwide.
In the last two months, about 60 farmers have signed up with CACIC, registering more than 60 hectares of rice plantation. The fund has generated around 2.7 million riels, or $650.
Komar said he expect the number to increase well into the hundreds by the year’s end.
Meas Chhil, a farmer from Kampong Speu province, said that signing up for the insurance has helped him feel more secure about funding for his farm, as drought has hit his province in the past three years running.
“Since 2012, there was not enough water.
The paddy rice was destroyed. I always rely on loans to restore my rice plantation.
This insurance will be an option for funding for me,” he said.