Action Taken Against Dual Benefits in Agricultural Insurance Subsidies; Insured Must Submit Mandatory Self-Declaration

September 25, Kathmandu – The government has imposed stringent policies to ensure transparency, orderliness, and the prevention of misuse in the distribution of agricultural, livestock, and herbal insurance premium subsidies.

The Ministry of Agriculture, Forests and Environment has issued the ‘Procedure for Providing Subsidy on Agricultural, Livestock and Herbal Insurance Premium 2083’, making the use of technology mandatory in the operational procedures and subsidy distribution systems of insurance companies.

The new procedure, approved by the cabinet on August 6, came into effect from September 17, replacing the older 2082 procedure.

Under this new regulation, insurance companies must compulsorily use the Nepal Insurance Authority’s real-time software called the ‘Agriculture and Livestock Insurance System’ when issuing agricultural and livestock insurance policies.

Strict measures have been put in place that prohibit issuing physical insurance policies unless there is a technical issue with the software. Even in such exceptional cases, prior approval from the Insurance Authority is mandatory.

To prevent duplicate subsidies and potential misuse, the procedure clearly states that insured individuals who receive insurance premium subsidies are not eligible to receive subsidies from any other government agency for the same purpose.

The insured must submit a mandatory self-declaration confirming they have not received such subsidies elsewhere when obtaining insurance policies. Additionally, if insurance companies, agents, technicians, loss assessors, or the insured are found violating the procedure, relevant bodies will report to the Insurance Authority for stringent disciplinary action.

The procedure also insists that insurance companies complete the payment claim processes within specified timelines. Companies are required to collect only the non-subsidy portion of the premium amount from farmers at the time of insurance enrollment.

To claim the subsidy provided by the government, insurance companies must submit comprehensive insurance policy details to the Authority within seven days after the end of each month. Subsidy payments will be made by provincial ministries or designated offices only upon the Authority’s recommendation.

The provincial government holds full authority for the implementation of insurance programs and budget management. The federal government will transfer budgets to the provinces with conditional financial transfers, and the respective provinces will be responsible for complete execution.

In case of budget shortfalls, provinces are authorized to manage additional funding from their own resources.

Eligible subsidy sectors are clearly classified in Schedule-1 of the procedure, covering 25 types of agricultural crops (such as paddy, potato, sugarcane, apple, orange, cardamom, coffee, bee-keeping, mushroom, etc.), 6 types of livestock (including poultry, cattle, pigs, goats, fish, and fodder crops), and 2 types of herbs (timur and mint), totaling 33 insurance policies eligible for subsidies.

Additionally, the provincial ministries have the authority to allocate further subsidies to other insurance policies using internal sources if deemed necessary.

To optimize the use and effectiveness of insurance premium subsidies, committees will be established at both central and provincial levels. A ‘Director Committee’ chaired by the Secretary of the Ministry of Agriculture, Forests and Environment will oversee policy decisions and coordination, while Provincial Coordination Committees, led by provincial ministry secretaries, will ensure effective implementation at the local level.

These committees will coordinate on premium rate determination, problem resolution, and program outreach to targeted groups. The procedure emphasizes maximizing the state investment by providing an 80 percent subsidy for insurance coverage up to NPR 10 million and 50 percent for amounts exceeding this limit.