More farmers get insurance, but crops still lag behind livestock and fish coverage

Agricultural insurance has seen significant expansion in Nepal, with over 700,000 policies issued in the past five years, covering Rs238.36 billion in insured value. However, the benefits have not proportionally reached crop farmers, as most policies are for livestock and fish.

Data reveals a widening gap in farmer interest, with livestock and fish insurance policies consistently outnumbering crop insurance. For instance, in fiscal year 2021-22, crop insurance saw 7,254 policies compared to 24,266 for livestock and fish. This disparity grew sharply the following year and continued through 2025-26, with crop policies often falling below 10,000 while livestock and fish policies exceeded 160,000.

The government offers substantial subsidies, covering 80 percent of premiums up to Rs10 million and 50 percent for higher values, aiming to protect farmers from losses due to natural disasters and diseases. Despite these efforts and a program covering 27 crops and six livestock categories, farmers are increasingly complaining about delayed subsidies and difficulties in accessing insurance payouts.

An investigation by the Ministry of Agriculture, Livestock, Forest and Environment uncovered irregularities by insurers, including charging excessive premiums, inconsistent insured values for animals, and issuing policies for unapproved livestock and crops. Issues such as discrepancies in risk start dates and the issuance of group policies instead of individual ones were also noted. These systemic problems hinder the effective implementation of the insurance program, leaving many crop farmers unprotected.

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Farms with bank loans are sometimes given higher insured values, while the date when the risk begins is made different from the date the policy is issued. We have also found cases where individual accident insurance is taken out, but a group policy is issued, and where a single photo or video is used instead of separate photos and videos of each animal.