Crop-insurance hope for Jamaica's agriculture
Zadie Neufville, Gleaner Writer
Some relief is on the horizon for Jamaican and regional farmers who have been forced to endure the effects of extreme weather events without crop insurance.
The Caribbean Catastrophe Risk Insurance Facility (CCRIF) has signaled its intention to support the Caribbean Community's com-mitment to developing affordable agricultural insurance solutions.
While the facility is not specifically designed for agri-culture and will not benefit farmers directly, Executive Director Dr Simon Young noted that the CCRIF provides an opportunity for governments and their agents to access cost-effective re-insurance for the agricultural sector.
"It will be up to governments and the private sector to build institutions and systems which can aggregate the farmer's risk into a single portfolio, either at a sub-national, national or regional level, which CCRIF can then provide onward coverage against natural catastrophes," Young said.
Described as a "risk-pooling facility", the CCRIF offers parametric insurance to member governments against the impacts of hurricanes, tropical storms, and earthquakes and, come year-end, excess rainfall. Parametric insurance provides budgetary support payments to the affected countries, based on specified intensities of the event and not on actual losses.
The CCRIF remains the world's first and only multi-country parametric insurance fund. Its chairman, Milo Pearson, said recently that it was designed to limit the financial impact caused by the devastation of hurricanes and earthquakes by providing "short-term liquidity" when the policy is triggered.
Launched in 2007, following Hurricane Ivan's devastation of the region in 2004, CCRIF was developed through funding from the Japanese government and capitalised through fees from its 16 member governments, the World Bank, the Caribbean Development Bank (CDB), the European Union, the governments of Canada, the United Kingdom, France, Ireland and Bermuda.
CCRIF's newest tool is regarded as being critical to the development of parametric solutions for the agricultural sector. The synthetic excess rainfall model will provide rainfall data that will enhance the management of excess rainfall and drought risks. The tools could support local efforts to find suitable insurance instruments for local industry.
Crop insurance is "essential to making the business (farming) a success", Director General of the Coffee Industry Board (CIB) Christopher Gentles noted, pointing to a World Bank-funded study now being under-taken by the CIB. The study is to establish wind and rainfall patterns in the Blue Mountains in an effort to establish risk, design a suitable product and establish a pilot programme for the industry. Productivity and profitability of coffee and banana, two of Jamaica's best export crops have, over the years, been severely impacted by severe weather events.
Crop insurance became less accessible after Dyoll Insurance crashed in 2004; following Hurricane Ivan's devastation of the region. After Hurricane Katrina in 2005, re-insurance options to the region dwindled because of its vulnerability to natural hazards. Crop insurance policies are now too expensive and are generally offered as non-catastrophic policies- providing no coverage against extreme weather events.
Among the CCRIF's member states are Jamaica, Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, Cayman Islands, Dominica, Grenada, Haiti, Jamaica, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Trinidad and Tobago and the Turks and Caicos Islands.