KATHMANDU: The government has decided to pay a part of its obligations under the agriculture and livestock insurance, paving the way for resuming the insurance program that has been suspended for two and a half months. The government has been providing relief to the farmers by covering a portion of the premium for insuring their crops and livestock.

However, the government's arrears have been increasing due to subsidies being announced without adequate resources. As a result, insurance companies stopped issuing new agricultural and livestock insurance policies from March 14, and farmers have stopped receiving payments for insurance claims.

A meeting chaired by Agriculture and Livestock Development Minister Jwala Kumari Sah on Thursday decided to pay Rs 970 million dues to the insurance companies as per the subsidy announced by the government. This payment will allow the postponed agriculture and livestock insurance program to resume. Minister Sah stated that the ministry will pay Rs 970 million out of Rs 2.17 billion the government is liable to pay the insurance companies, with the remaining amount to be paid by the end of the current fiscal year.

Insurance companies had suspended the sale of new policies due to the government's delay in releasing the subsidy amount. Minister Sah mentioned that the Ministry of Finance has approved Rs 970 million to fulfill the government obligations, which will be disbursed within a week.

Following the decision, insurance companies announced that they would resume selling policies from Friday.

"We have informed all our members to start the insurance scheme from May 31," said Birendra Bahadur Kshatri, CEO of Siddharth Premier Insurance Limited.

The Agriculture and Livestock Insurance Program of the government has faced challenges due to increased subsidies without sufficient resources. According to the ministry's data, the government's liability for premium subsidies exceeds the allocated budget. The government allocated only Rs 600 million for agriculture and livestock insurance for the current fiscal year, but the amount owed to insurance companies by mid-March has reached Rs 2.17 billion. Consequently, farmers have been unable to receive payments for their insurance claims on time.

Currently, agricultural insurance covers grains, crops, pulses, legumes, oilseeds, vegetables, mushrooms, fruits, dry fruits, tubers, sugarcanes, spices, and flowers, among others. Livestock insurance covers cattle, sheep, goats, horses, pigs, domesticated animals, birds, fish, and other livestock. Additionally, there is a provision to insure trees and shrubs under herbs.