CROPS INSURANCE

Inspite of many technological advancements in agriculture sciences including weather forecasting, Crop farming enterprise still remains vulnerable to the vagaries of nature including floods, drought, hailstorm, windstorm, pest and diseases, etc.
Hence, it continues to be a risky business indeed. Moreover, an overwhelming majority of our farmers engaged in crop farming are small farmers with meagre financeal resources. When crop losses occur, they are the worst affected. Hence, farmers need financial protection against total and partial crop losses because of calamities happening due to these factors. Crop Insurance provides the much needed protection in these case. Mindful of the role CI has played in the sustained development of Agriculture production in many countries , the need and desirability of Crop Insurance Program for the country's farmers has been felt for a long time. However for one reason or another, it could not materialize until the bank of punjab took the initiative and in collaboration with the East West Insurance officially launched Crop Insurance Scheme for its farmers borrowers in july 2004.
Under this scheme, EWI insures crop loans advanced by the Banks to the farmer borrowers against a wide range of perils namely, floods, heavy rains, hail storm, wind storm, frost, drought, pests etc. at a minimum cost and indemnifies crop losses of Insured farmers to the extent of outstanding loans in a Calamity situation. Our Crop Insurance Scheme is now in the 4th year of operation and is operating succussfully to the full satisfaction of the borrowers of bank of punjab. Other Banks have also approached us, expressing their interest in the scheme.
Now that the State Bank of Pakistan(SBP) is also interested in a CI program, and has been holding meetings with Banksand Insurance Companies in this regard, It is expected that a uniform CI program will be formulanted soon in which all the Banks and Insurance Companies can participate.
It is worth mentioning here that the Draft CI Proposal which the SBP has circulated as a working paper for discussion by the representative of Banks and Insurance Companies contains many of the essential features of EWI Crop InsuranceScheme which we have been advocating for the past many years.
The year 2004 was the first time, in the history of the Company that we generated a premium income of Rupees. 2.51 million under the CI portfolio, which has increased to now more than Rupees 8.57 million in 2007.We are expecting this premium to grow manifold in the years ahead when other Banks especially the large Banks (HBL, NBP, MCB, ABL) begin to offer the CI shceme to their Borrowers. Beedless to stay, there is indeed tremendous potential for generating premium income under this portfolio.