The Sugar Cane Growers Council believes the UN Capital Development Fund’s parametric micro-insurance product provides timely risk cover for cane growers. Although the Council was a late entry as an implementing partner, it has already set out awareness and advocacy plans for the pilot parametric microinsurance product.

The Council boasts a membership of 12,000 cane growers.

According to the Council, sugar cane is a resilient crop but still no match for the full brunt of a tropical cyclone in the higher categories. Reflecting on the devastating impact of Tropical Cyclone Yasa last year, the Council shared that cane growers lost suffered up to 60% loss in their crop. The Council noted that farmers who did not have insurance cover also recorded 100% crop loss, which was a big blow to their livelihoods and increased their financial burdens and hardship. Such massive losses will inevitably have a knock-on effect on the nation’s economy, given the important role of the sugar industry.

“To mitigate against these impacts, we need to provide some form of insurance cover that can offer immediate relief to beneficiaries and farmers,” stated the Council’s general manager operations, Sunil Chaudhary. “This is where the parametric microinsurance product comes in handy.”

The Council believes that the strengths of the product are encouraging as cane growers and beneficiaries who sign up would receive quick and easy assistance in the aftermath of a cyclone. Under the parametric microinsurance product, the Council shared that beneficiaries would not have to deal with stringent requirements to access funds for disaster recovery.

The payout is based on pre-defined triggers and can be processed within 7-14 days of the ‘trigger event.’ Fast processing of relief funds was another upside of the microinsurance product that the Council would include in its awareness and advocacy work in the community.

According to the Council, savings is an issue for many cane growers in remote areas, which means much hardship if the crop is destroyed or damaged in a cyclone. Towards this end, the micro-insurance product ensures that affected farmers who are covered receive the needed financial assistance and basic necessities to get their lives back on track.

The Council noted that often consumers would compare insurance premiums and benefits, many opting for insurance products that provided good benefits and returns on their investment. In this regard, the Council is confident that the UNCDF product would be well-received by its membership. The Council had previously assisted growers with general insurance cover, offered as a bundle, but there was no specific cover for natural disasters, funerals and fire.

While the pilot project is still being rolled out by the implementing partners, the Council believes the strengths and weaknesses would be determined by the post-disaster impact assessment. This, in turn, could affect the perception of farmers or potential beneficiaries of the product. The Council also notes that crop insurance is an expensive affair for some farmers, but they were working with UNCDF to make product accessibility and finance available for interested farmers.

In terms of product sustainability, the long gaps in between cyclones could pose a challenge when it comes to persuading members to renew their insurance cover, especially when the income base for agriculture was not that big because of the establishment of small farm holdings.

Building on the success of their bundle insurance for members over the past three years, the Council believes the difference with the parametric insurance product was the payment structure. Previously the insurance premium was paid by the Council. This year, the Council is encouraging the membership to take ownership of this parametric microinsurance product and pay the FJ$100 annual premium.

The Council shared the sentiments of other implementing partners that any insurance product presented to members or other potential beneficiaries should include attractive benefits to incentivise uptake, rather than farmers viewing insurance products as a burden.

“There are two things to look at. One is the product and its benefits,” Mr Chaudhary noted. “The other part is financial literacy. These two go hand in hand. Once you increase financial literacy, the people become wiser. They’d be able to make informed decisions about what they’re investing in and what to expect so the product offering has to be attractive that way.” In terms of inclusivity, the Council believes that every member should be treated equally, regardless of gender or ability.

Moving forward, the Council is planning to disseminate information about the parametric microinsurance product to its farmers and stakeholders in the Western Division, before branching out into other divisions of the cane sector.