Non-life insurance companies have resumed issuing agri-insurance policies after the government promised to release the remaining portion of agricultural and livestock insurance subsidies. The companies had suspended the agri-insurance from the second week of May after the government failed to release the subsidy amount. The Ministry of Agriculture and Livestock Development and the Nepal Insurers' Association (NIA), the umbrella organization of non-life insurance companies in the country, reached an agreement on Tuesday with the former agreeing to release the subsidy amount immediately. During a meeting with Agriculture Minister Beduram Bhusal on Tuesday, the ministry urged the association to resume the agri-insurance business. Chunky Chhetry, President of NIA said that insurance companies have resumed the agri-insurance business from Wednesday. “We have started issuing new policies after the government's commitment to release the subsidy amount,” said Chhetry.

The government has an outstanding amount of Rs 2.94bn to be paid in subsidies. Of which, the Agriculture Ministry released Rs 740m in the first week of June. However, the insurance companies were adamant that they would not restart agri-insurance until the dues are not released. Now, the government has promised to release Rs 400m in the next few days.

“The government has promised to pay Rs 400m in the next few days and the remaining dues by mid-July,” said Chhetry. The government has been providing an 80 percent subsidy on agricultural insurance premiums. In a bid to cover the damages and losses to agriculture, the government introduced the Agriculture and Livestock Insurance Program in the fiscal year 2013/2014. In the initial phase, the government provided a 50 percent subsidy on the premium of the insurance. The premium was later increased to 75 percent, and currently, it is 80 percent. Now, the farmers have to pay Rs 20 out of Rs 100 premium while insuring their crops and livestock. The insurance companies will get the rest Rs 80 from the government. The statistics of NIA show the business of agriculture insurance has increased by 417.55 percent in the first half of FY 2022/23. The non-life insurance companies have collected Rs 1.09 billion in insurance premiums from agriculture insurance in the first six months of the current fiscal compared to Rs 211.13m during the same period of the last fiscal year. The insurers have sold 82,746 agricultural insurance policies in the current fiscal year.