TIL BDR GHALLEY | Thimphu
For many farmers across the country, uncertainty has become a defining feature of each growing season. Crops that once followed predictable cycles are now increasingly vulnerable to erratic weather, pest outbreaks, and wildlife incursions.
Livestock losses, too, have become more frequent, often wiping out months, if not years, of effort in a matter of days.
It is within this fragile reality that the Royal Government of Bhutan has introduced the National Crop and Livestock Insurance Scheme (NCLIS), a nationwide initiative aimed at institutionalizing a sustainable risk management system for farmers and reducing reliance on ad hoc compensation mechanisms.
Launched on November 11, 2025, the scheme represents a strategic policy shift toward a structured insurance model based on shared responsibility between the state and farmers.
It is designed to provide financial protection against increasing agricultural risks, including climate change, pest infestations, livestock diseases, and human wildlife conflict.
Officials from the Ministry of Agriculture and Livestock said the scheme is intended to strengthen long-term resilience in the agriculture sector, which continues to support a large portion of Bhutan’s rural population.
The NCLIS replaces the traditional system of post-disaster compensation with a pre-emptive insurance mechanism. Under the new model, farmers contribute to insurance premiums while the government provides substantial financial support.
“The scheme marks a shift from reactive assistance to proactive risk management,” officials said. “It aims to ensure that farmers are better prepared to cope with losses rather than depend solely on relief after damage occurs.”
Recent agricultural losses, running into millions and affecting hundreds of households, have underscored the urgency for a more reliable and institutionalized protection system.
To ensure affordability, the government subsidizes 50 percent of the insurance premium, significantly lowering the cost burden on farmers.
Even with the application of the Goods and Services Tax (GST), officials maintain that annual contributions remain modest relative to the protection offered.
Premium rates under the scheme are maintained at minimal levels and are comparable to, or lower than, similar insurance programs in the region, with rates ranging from 8–30 percent in India, 7–10 percent in Sri Lanka, 5–10 percent in Bangladesh, and 6–12 percent in Pakistan.
While Bhutan’s rates vary depending on the type of crop or livestock insured, officials said they remain competitive and accessible for smallholder farmers.
The scheme also allows partial enrollment, enabling farmers to insure selected crops or livestock instead of their entire holdings. This flexibility is intended to accommodate varying financial capacities and risk profiles.
The NCLIS is designed to cover all 205 gewogs across the country, ensuring universal access to insurance services.
Local governments play a central role in implementation, with Tshogpas and gewog officials facilitating registration, damage reporting, and coordination with insurance providers.
Officials said the initial phase of awareness and orientation has been completed nationwide, with continued outreach efforts underway to improve understanding and uptake.
“The involvement of local governments ensures that services are delivered closer to farmers and are responsive to local needs,” officials said.
The scheme incorporates a structured reporting and claims process to ensure transparency, accountability, and timely settlement. Claims are subject to verification procedures involving local authorities and insurance agencies.
While some stakeholders have raised concerns about the length of the process, officials emphasized that these measures are necessary to prevent misuse and maintain the financial sustainability of the scheme.
“At the same time, we are working to streamline procedures based on feedback from the field,” officials added.
Participation in the NCLIS is voluntary, and authorities expect enrollment to increase gradually as farmers become more familiar with the scheme.
“Farmers typically take time to assess the benefits, coverage, and procedures before enrolling, particularly when financial contributions are involved,” officials noted.
The government’s role, they added, is to provide a reliable and accessible platform, while adoption ultimately depends on farmer confidence and willingness.
The introduction of the scheme comes amid growing concerns over the impact of climate variability and environmental pressures on agriculture. Increasing instances of crop damage, livestock mortality, and production losses have highlighted vulnerabilities within the sector.
Officials said recent events alone have resulted in losses worth millions of ngultrum, reinforcing the need for comprehensive insurance coverage.
“In the current context, such a scheme is no longer optional but necessary,” officials stated.
Looking ahead, the government has outlined key priorities to strengthen the scheme’s implementation and effectiveness, including expanding awareness campaigns to improve participation, streamlining administrative and claims procedures, enhancing insurance products and coverage options, and strengthening coordination with local governments and insurance partners.
The NCLIS is positioned as a long-term investment in agricultural sustainability and rural livelihoods. Officials expressed confidence that participation will grow as the benefits of the scheme become more evident over time.
