The insurance coverage target for rice-growing areas has been raised by 500,000 rai to 2 million for the 2015 harvest year, given strong demand as Thailand faces the worst drought in a decade.
The coverage target was increased from 1.5 million rai as farmers cultivating 1.33 million rai of rice paddy bought crop insurance as of July 8, said Pravej Ongartsittigul, secretary-general of the Office of the Insurance Commission.
The new target has been approved by the Finance Ministry, the Agriculture and Agricultural Cooperatives Ministry, the state-owned Bank for Agriculture and Agricultural Cooperatives and the Thai General Insurance Association. The target will soon be put up for cabinet approval.
Rice insurance offers protection from floods, drought, storms, pests and diseases. Besides drought, farmers also face low crop prices and high household debt.
"Rice farmers are concerned their production will be lower than normal, resulting in insurance policies selling quickly. With increased risks, we expect this trend to continue," Mr Pravej said.
Insurance policies will be sold until Aug 14 for most of the country, but until Dec 11 in the South. Policies are sold by seven non-life insurance companies — Bangkok Insurance, Chao Phaya Insurance, Dhipaya Insurance, Navakij Insurance, Thaivivat Insurance, Tune Insurance and Viriyah Insurance.
The top three regions buying rice insurance are the upper Northeast with 569,665 rai, the lower Northeast at 506,553 rai and the lower North at 175,449 rai.
This year's insurance programme divides farmland into five areas depending on risk exposure. Farmers with the lowest risk are required to pay 60 baht a rai while the government contributes 64 baht a rai.
In the highest-risk locations, farmers are required to pay 100 baht a rai while the government contributes 383 baht a rai. Insurers will pay 1,111 baht a rai for damaged crops from a natural disaster and 555 baht a rai for damage from pests or diseases.