Outline of the Project

Project Name

Project of Capacity Development for the Implementation of Agricultural Insurance

Subject

Agricultural and Rural Development

Country

Indonesia

Date R/D Signed

5th April 2017

Project Site

East Java Province, South Sulawesi Province, West Java Province

Term of Cooperation

Oct. 1, 2017 to Jun. 30, 2023

Implementing Organization

Ministry of National Development Planning/National Development Planning Agency (BAPPENAS), Ministry of Agriculture, Ministry of Finance, Agency for Meteorology Climatology and Geophysics (BMKG), PT Asuransi Jasa Indonesia (Jasindo)

Background

Agricultural insurance in Indonesia is a relatively new instrument employed by the Government to protect farmers from crop failures caused by natural disasters, plant pest attacks, outbreaks of infectious animal diseases, impacts of climate change and/or other risks stipulated in the Farmers Protection Law (19/2013). In 2010-2015, JICA supported the Ministry of Agriculture (MOA) in piloting an indemnity-based agriculture insurance. In 2015, based on the results of various pilot initiatives, the Government of Indonesia started the implementation of an indemnity-based agricultural insurance for small-scale rice farmers called AUTP (Asuransi Usaha Tani Padi) in major rice producing provinces, under which 80% of the premium are subsidized by the Government using the state budget allocated to the MOA.

The indemnity-based insurance scheme requires damage verification for every single incidence of damage claims and it has been facing challenges such as high operational and administrative costs. Furthermore, appropriate data management system, including data collection, processing and administration, need to be in place to avoid risks of data inaccuracy and implementation failures. There has also been an high interests in the Government of Indonesia in developing other types of agricultural insurance scheme, including the index-based insurance, to supplement AUTP.

Against these backdrops, the Project of Capacity Development for the Implementation of Agricultural Insurance has been developed and implemented since October 2017 to address challenges through enhancing capacities of the key ministries/agencies in promoting the agricultural insurance in Indonesia.

The Overall Goal

Agricultural insurance is continuously implemented in Indonesia.

Project Purpose

Capacity of the key ministries/institutions, the concerned local governments, and other relevant organizations to enhance the implementation of agricultural insurance is strengthened.

Output

1. Capacity to implement the current scheme of agricultural insurance for paddy is strengthened.
2. Capacity to analyse and improve agricultural insurance scheme is strengthened.

Project Activities

0-1.	Conduct the baseline survey.
0-2.	Facilitate the consensus building among the Implementing Agencies on agricultural insurance policies and operations.
0-3.	Conduct the endline survey.

1-1.	Carry out surveys and monitoring to improve AUTP.
1-2.	Conduct TOT for extension workers/pests control specialists, DINAS officers, Jasindo staff and other relevant stakeholders in the pilot sites, to promote AUTP.
1-3.	Support dissemination of agricultural insurance operation system (i.e. SIAP)

2-1.	Conduct trainings on meteorological and climate data analysis suitable for the development of the agricultural insurance.
2-2.	Conduct a feasibility study on AYI insurance at the pilot site.
2-3.	Produce policy recommendations on the index based agricultural insurances, to supplement AUTP.

Inputs

Japanese side

• Project personnel
• Trainings in Japan
• Local operational expenses

Indonesian side

• Counterpart personnel
• Operational expenses related ot domestic travel of the counterpart personnel, meetings etc.