ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued a report titled “Securing Livelihoods: A Comprehensive Look at Crop and Livestock Insurance in Pakistan and the Way Forward’’. This report emphasizes the crucial need for agricultural insurance in Pakistan which currently accounts for only 2% of the total non-life sector premiums.

The report underscores the central role of Pakistan’s agriculture sector in the economy, accounting for 23% of the GDP, with 63% of this share attributed to livestock. However, this sector faces significant risks including climate change, floods, droughts, pests, diseases, and high input costs.

Despite the global prominence of agriculture insurance in over 100 countries, Pakistan’s agricultural insurance landscape remains underdeveloped, accounting for only 2% of the total non-life sector premiums. At present, government-led insurance schemes cover approximately 14% of farmers, necessitating substantial expansion and enhancement. The report provides a detailed review of existing government-led agricultural insurance schemes such as the Crop Loan Insurance Scheme, the Livestock Insurance for Borrowers, and the Punjab Fasal Beema Scheme. It also discusses several pilot initiatives by the private sector.

The report also highlights challenges, both on the demand and supply sides, that hinder the growth of agricultural insurance in Pakistan which include the limited capacity of the insurance industry of Pakistan to cover substantial losses in the agriculture sector and the absence of robust data necessary for risk measurement by the insurers. A pervasive lack of insurance culture among farmers, driven by perceptions of non-viability and unaffordability, further stifles demand.

To address these issues, the report recommends reassessing current schemes and establishing insurance pools or consortiums to consolidate risks, making agricultural insurance financially viable for insurers and economically feasible for farmers. A mandatory national crop insurance initiative and a nationwide livestock insurance program with graduated subsidies for subsistence farmers are suggested. Integration of crop and livestock insurance into social protection initiatives of the Government and incorporation of agricultural insurance into the national disaster risk financing strategy and food security policies are among other proposals.

The report is available at SECP’s website at