Feasibility Study for Crop and Livestock Index-insurance - Papua New Guinea
Papua New Guinea (PNG) is a lower middle income country located in the Asian-Pacific region. Agriculture is the predominant source of livelihood in the country, with the agricultural sector accounting for 67% of the total labor force and 35% of the GDP in 2010. PNG has a very high exposure to earthquake, tsunami and volcanoes as well as being affected by climatic perils including tropical cyclones and the influence of the El Nino Southern Oscillation (ENSO) cycle which brings with it extremes of drought and excess rain and flooding.
Project type:
Agricultural insurance pre-feasibility study
Requesting Agency:
Department of Agriculture and Livestock (DAL)
Project rationale:
The Government of PNG identifies that agriculture has and will continue to be the backbone of the PNG economy by providing food, income and employment to the vast majority of the rural population. It has requested technical assistance from the World Bank for an agricultural insurance pre-feasibility study in order to assess the viability of market-based agricultural insurance in PNG.
Key achievements:
- The pre-feasibility study has concluded that the potential to develop crop and livestock insurance products and programs is currently fairly restricted in PNG by a number of factors including the lack of an agricultural insurance culture and functioning market, the lack of demand especially by small mainly subsistence farmers, and the lack of crop production, crop damage and weather data on which basis to design and rate such programs.
- However, the study has identified a series of potential traditional indemnity-based and/or parametric or index-based crop insurance products for the cash crop/plantation export crops and food crop sectors that might be developed. These products include individual grower (micro-level) insurance products and macro-level products that are designed to insure the Government of PNG against catastrophe climatic events.
- Potential next steps include the implementation of a full feasibility study for agricultural insurance, the design and implementation of crop insurance pilots, the creation of an Agricultural Insurance Committee, and the creation of a Technical Support Unit (TSU).
Key stakeholders:
The National Weather Services, the Office for Climate Change and Development (OCCD), the Insurance Commission and the export industry corporations for coffee, coconuts and oil palm.
Contacts: