Kathmandu, Nepal, April 26: Sagarmatha Lumbini Insurance Company Limited (SALICO) has introduced an index-based milk production insurance policy aimed at protecting farmers from losses caused by rising temperatures.
The product, developed in technical collaboration with PlantSat, links payouts to temperature-induced heat stress that reduces milk production in cows and buffaloes.
According to the company, the policy will be calculated based on daily maximum temperatures recorded over a 150-day period—from late April to mid-September.
SALICO CEO Chanki Chhetri said the scheme targets cattle farmers, cooperatives, and groups in Kanchanpur, Kailali, Bardiya, Banke, Dang, Kapilvastu, and Chitwan districts. The insurance operates on predefined temperature thresholds.
So far, 1,627 cows and buffaloes owned by farmers affiliated with various cooperatives have been enrolled in the scheme.
The policy has been approved by the Nepal Insurance Authority and reinsured through Nepal Reinsurance Company.
Suman Ghimire, founder and CEO of PlantSat, said compensation will be provided only when actual temperatures exceed the predefined thresholds based on official data.
The system uses an index-based trigger mechanism to determine eligibility for claims, enabling faster and more transparent payouts. Temperature data will be sourced from the Department of Hydrology and Meteorology Nepal.
Once the trigger level is reached, claims will be processed automatically. According to Subhash Dixit, head of the company’s claims department, payments will be transferred electronically to beneficiaries’ bank accounts within seven days of receiving the required data. #Nepal #milk
