Crop insurance mechanism

WHILE chairing the mid-term review meeting of Agricultural Credit Advisory Committee (ACAC), the Governor of State Bank of Pakistan, Dr Shamshad Akhtar, issued a directive that, if followed up properly, can go a long way in helping improve the performance of our agricultural sector. It calls for exploring the possibilities of creating an effective crop insurance mechanism to reduce loss risks in the event of natural calamities. The value of such a mechanism cannot be overemphasised given the fact that our economy is still based on agriculture. The biggest component of the industrial sector, textile industry, is dependent, too, on what goes on in the cotton growing farmlands of Punjab and Sindh, and of course, all essential food items and a number of other commodities are provided by agriculture for local needs and, in some instances, for export purposes as well. Yet, the sector remains mired in dismal conditions. The farmers have to grapple with the vagaries of weather and other challenges on their own, without the hope of landing on a safety net when faced with the threat of a grievous damage. The facility of agriculture loans so far has been heavily biased in favour of big landlords, who use their connections not only to obtain loans, but often times also to have the loans written off. It is good to note, therefore, that at the ACAC meeting the SBP governor called for an extensive agricultural loans coverage through a policy that is to ensure the farmers are not overcharged on account of interest rate or pricing mechanism.
Furthermore, with a view to facilitating bank lending to farmers a comprehensive mapping is to be undertaken of districts and villages where relevant government initiatives are underway. Apparently, the scheme is aimed at covering ordinary farmers who lack the means to approach agricultural banks and other rural credit organisations, a much-desired step in the right direction. Introduction of crop risk insurance will further help farmers to think about enhancing the quality and quantity of yields. They must have the means to make bigger investments on new high seed varieties and other important . The proposed agricultural insurance policy needs to be drawn after careful analysis of the various risk factors. The thrust at the moment seems to be towards a common crop insurance policy prevalent in some other countries, which deals with losses caused by natural hazards like drought, hailstorms, insect attacks, etc, which of course is a basic requirement. But there is also need to look at some other risk protection practices that are likely to involve increased investments. One such insurance policy entails calculation of revenue based on yield. If the yield is below the anticipated level the insurance people pay for the losses. Another one provides protection against the cost of a crop when its value turns out to be lower than the amount of insurance. Then there are different insurance policies for different crops. And, of course, the insurers are expected to act promptly in processing insurance requests as well as in making on schedule payments. Hopefully, the concerned officials will examine all the prevailing practices with reference to our needs in order to come up with a comprehensive agricultural risk protection policy.



Lebanon bleeds

THURSDAY epitomised Lebanon’s lingering tragedy as barely a few miles separated mourning pro and anti-Syrian legions, one grieving for slain former premier Hariri, the other bidding final farewell to murdered Hezbollah number two Imad Mughniyeh. Tension mounted as Beirut’s strong rains could not prevent the determined Lebanese from showing up in the thousands, with thousands more military personnel present to discourage further friction in a country already running without a president or a functioning parliament. Hariri embodied hope that billions of dollars pump priming an economic resurgence could suffice to revive Lebanon’s fabled status in the Levant, while for supporters and sympathisers Mughniyeh personified party ideals that once rid of foreign, particularly Israeli troubles, the country would be free to make progress. Both are now dust. Even though no official responsibility has been accepted for the strike, it is more or less clear Mughniyeh’s end came at the behest of the Israeli security establishment. Long a thorn in the West’s side, he was Washington’s most wanted man, a dubious distinction that Osama bin Laden needed something like 9/11 to invite. The hit came in Damascus, which means Bashar’s regime in Syria is about to have its share of troubles increased also, especially since the Bush White House has just called for slapping extended sanctions on its top members.
For Lebanon, the future seems to grow bleaker as events unfold. Indeed, it’s been quite a long time since good news came from Beirut, with things taking pronounced turns for the worse since Hariri’s assassination three years ago to the day. The country is all the more unfortunate because the crux of the problem remains the same, and its diverse mix of ethnicities, requiring the most delicate juggling to keep balance in parliament, have yet failed to find unity without which the troubles will only increase. Lebanon remains the most fertile ground for the wider region’s numerous proxy battles. For a country struggling to regain political sanity, it is a poor reflection on political forces that the main battle must be fought between domestic political elements loyal and opposed to other capitals. At the risk of repetition, Lebanon’s problems are not going away till its own people wait for the chips to fall where they may. They have already made too many sacrifices, with precious little to show. And they will have to shed more blood and tears to usher in better times. The only difference will be that if they do it in the right way, they will have something intrinsic as compensation.

—Khaleej Times