Sri Lanka’s Agricultural and Agrarian Insurance Board (AAIB) will designate February 2026 as “insurance month” for farmers, offering expanded access to crop insurance across the country. The AAIB – under the Ministry of Agriculture, Lands, Livestock, and Irrigation – has scheduled the month-long campaign to promote enrolment and provide information to farmers on available products and conditions.
During this period, farmers will be able to purchase coverage for multiple crop types and production risks, including weather-related and biological events. According to Sri Lanka Mirror’s report, eligible crops include paddy, maize, potatoes, onions, soybeans, and chili, along with other crops cultivated in different regions. The insurance will cover losses from drought, floods, wild elephant damage, insect and pest attacks, plant diseases, and fire, risks that regularly disrupt agricultural production in Sri Lanka.
To explain the scheme, AAIB has released sample compensation limits and corresponding premium rates. For crops such as cowpea, mung bean, finger millet, sesame, and horse gram, the program offers coverage of LKR 60,000 per acre. The premium is set at 7% of the insured amount. The same 7% premium rate applies to crops including sweet potato, cassava, cabbage, beans, tomatoes, and pumpkin. Under this pricing, a farmer insuring sweet potatoes for LKR 100,000 per acre would pay a premium of LKR 7,000. The structure provides fixed premium-to-sum-insured ratios, allowing farmers to compare the cost of cover with expected yields and market prices when deciding how much insurance to buy. In addition to these lines, AAIB has introduced separate schemes for higher-value crops such as ginger, turmeric, cinnamon, pepper, pineapple, papaya, and banana. These products are intended for growers whose revenue is concentrated in fewer cash crops and who face exposure to localised climate and disease incidents that can significantly affect income.
Farmers seeking further details are being directed to AAIB’s head office and district offices across the country. Local offices are expected to provide information on eligibility, premium calculations, policy terms, and the claims process, and to assist with enrolment during the February campaign. For insurers and reinsurers, the initiative illustrates the role of state-backed agricultural insurance schemes in markets where farm sizes are relatively small and private distribution can be costly. The campaign is also likely to generate additional data on crop types, insured values, and loss patterns, information that can support future product development and risk-sharing arrangements with the private sector.
The Sri Lankan initiative is taking shape as agricultural insurance continues to expand worldwide. A report by Allied Market Research estimates that the global agricultural insurance market was valued at US$38.5 billion in 2022 and could reach US$67.4 billion by 2032, representing a compound annual growth rate of 5.8% between 2023 and 2032. The study describes agricultural insurance, often referred to as crop insurance, as a risk transfer tool for farmers and agricultural producers facing losses from adverse weather, pest and disease outbreaks, and other natural events outside their control. Coverage can address reduced yields, crop failures and, in some cases, price movements and large-scale events such as floods and droughts.
According to the report, demand for agricultural insurance is influenced by dependence on rainfall and seasonal weather patterns, volatility in agricultural commodity prices, changing climate conditions, and recurring plant disease incidents. These factors are prevalent across Asia, where both smallholder and commercial producers rely on a limited number of growing seasons and are exposed to production and income volatility. At the same time, the study notes that high-frequency and high-severity events, combined with limited long-term data in many markets, can result in technical premium levels that smaller farmers find difficult to pay. Premium subsidies and deductibles can mitigate costs but may also affect how farmers perceive the value of coverage.
The report indicates that multi-peril crop insurance (MPCI) was the largest product segment globally in 2022 and is expected to record the fastest growth over the forecast period. Banks are identified as the leading and fastest-growing distribution channel, reflecting the link between rural credit and insurance purchases. North America currently accounts for the largest share of agricultural insurance premium, while the Asia-Pacific region is projected to generate the highest revenue growth by 2032. Against this backdrop, Sri Lanka’s February 2026 insurance month will be closely watched by regional insurance professionals as one example of how public-sector schemes, simplified pricing, and a national office network are being used to extend agricultural insurance to a wider base of farmers in an emerging market.
