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The state-owned Sadharan Bima Corporation (SBC) has launched, for the first time, flood index-based crop insurance for haor (wetland) areas.
Under a pilot project, the SBC has launched the scheme at Mithamoin sub-district under Kishoreganj district.
Under this risk coverage, haor farmers will get compensation for their Boro crops if they (paddy) get inundated by floodwaters.
The insured period is April 01 to May 15 next.
Initially, 415 farmers took this coverage. They paid Tk 1,500 for each acre of land. They will get compensated worth Tk 15,000 for each acre.
This is a joint project of the SBC and ?the London-based OXFAM.
SBC managing director Syed Shariyar Ahsan said flood index-based insurance is the first of its kind in Bangladesh.
"We're piloting it in Kishoreganj. Following success, we'll expand it to other haor areas," he told the FE.
Mr Ahsan said there is a need for government assistance to fund the farmers so that they can pay premiums.
The SBC top brass said the farmers living in haor areas often fall victim to flash floods. They lose everything to such natural calamities.
Last year, farmers of eastern Sunamganj district faced such floods several times, he continued.
Mr Ahsan said such floods impact the overall production of the Boro staple.
In 2017, the country's north-eastern region had two floods that hit 32 districts, affecting nearly 9.0 per cent of the cultivated croplands.
A study of the local think tank Centre for Policy Dialogue on floods said the gross value of foregone production was about Tk 27 billion in the two floods.
Finance minister AHM Mustafa Kamal in his current budget speech highlighted such crop insurance to compensate farmers to overcome losses wrought by natural disasters.
However, the compensation will be calculated by using data generated by satellite.
The insured farmers will get damages through the mobile financial system.
The OXFAM, the sponsor of the project, has experience both at home and abroad in such kind of insurance.
OXFAM senior programme officer KNMN Azam, who deals the issue with the SBC, told the FE that they have similar experience in Sri Lanka.
An Indian consulting firm is also working with them, he mentioned.
SBC official Abdul Karim, who handles the matter, said such risk coverage would ensure food security in haor areas, especially during the ongoing COVID-19 pandemic.
The SBC has planned to gradually expand the insurance product across the country, he told the FE.
The OXFAM made the initiative as the prime minister in an international insurance seminar in Dhaka last November called for launching such insurance here.