January 31, 2019
On January 9, the Japan International Cooperation Agency (JICA) signed a Memorandum of Understanding (MOU) with Swiss Re Asia Pte. Ltd. (hereinafter “Swiss Re”) in Jakarta for the strengthening and improvement of the agricultural insurance system for rice crops in Indonesia within the Project of Capacity Development for the Implementation of Agricultural Insurance, a technical cooperation project underway in Indonesia.
The objective of the MOU is to recommend policies for the current agricultural insurance system in cooperation with Swiss Re, an insurance corporation with experience and expertise in the agricultural insurance sector in countries throughout Asia, toward the next National Medium-Term Development Plan (known by the Indonesian acronym RPJMN) being formulated by the Government of Indonesia for the years 2020 to 2024.
Indonesia is the third largest producer of rice in the world, and most of the rice production comes from small-scale farmers. In order to protect farmers from losses due to the various natural disasters that occur and to achieve rice self-sufficiency, the Government of Indonesia, under its Mid-term National Development Plan (RPJMN) 2015-2019, has been conducting an indemnity-based agricultural insurance pilot program for paddy rice production that targets coverage of one million acres of paddy fields each year. In October 2017, JICA began implementation of the Project of Capacity Development for the Implementation of Agricultural Insurance with support from the National Agricultural Insurance Association of Japan, casualty insurance companies of Japan and other organizations to make the agricultural insurance system more sustainable toward the next RPJMN.
JICA and Swiss Re will work with various institutions of Indonesia to identify issues in the current agricultural insurance system toward the next RPJMN to be formulated in the second half of this year and carry out activities aimed at recommending policies to improve the agricultural insurance system.