Climate index insurance can protect agricultural sector, says expert

Jakarta (ANTARA) - IPB University climatology expert Prof Rizaldi Boer has said that the implementation of climate index insurance is one of the solutions for protecting farmers and the agricultural sector from losses due to crop failure caused by weather factors.

“With climate index insurance, what is insured is not the crop, but the climate index,” said Rizaldi Boer during an online discussion followed from Jakarta on Friday.

According to him, this insurance can protect farmers and the agricultural sector when extreme weather occurs during the planting or harvest season, which can lead to crop failure.

Rizaldi gave the example that climate index insurance could be applied when rainfall during the rainy season falls below 200 millimetres (mm), which is predicted to cause crop failure or reduced production.

It is this condition, said Rizaldi Boer, that can be used to pay insurance claims to farmers, rather than paying out only when farmers actually experience crop failure.

“So we can adopt 200 mm as the index used as the basis for claim payments. So whenever rainfall during the rainy season falls below 200 mm, the insurer must pay immediately,” he said.

However, Rizaldi Boer noted that farmers may still be able to save their crops by using pump irrigation.

According to him, if climate index insurance is implemented, farmers will gain significant benefits.

“Even if the crops do not die because the farmer adopted technology, the farmer can still claim, and this will provide a double benefit for insurance participants,” he said.

So far, said Rizaldi Boer, agricultural insurance has only paid out when crops actually fail, which is why many farmers are reluctant to insure their crops.

He said that climate index insurance has already been implemented in several countries, such as the Philippines and countries in Africa.