Under the new "Procedure for Providing Subsidy on Agriculture, Livestock and Medicinal Herbs Insurance Premium, 2083," the government will provide an 80 percent premium subsidy on sum insured amounts up to Rs 10 million. For any additional sum insured exceeding Rs 10 million, a 50 percent subsidy will apply.
Issued by the Ministry of Agriculture, Forest and Environment pursuant to Article 65(4) of the Economic Procedures and Financial Responsibility Act, 2076, the procedure officially came into force on August 17, 2026. The Cabinet approved the updated subsidy rates on August 5, following a ministerial decision on August 11.
The updated regulation replaces the previously enforced "Procedure for Providing Subsidy on Crop and Livestock Insurance Premium, 2082."
Key Provisions and Implementation Guidelines
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Budget & Administration: The central Ministry will allocate insurance funds to provincial governments via conditional financial transfers. Provincial bodies are tasked with managing budget execution and distributing subsidy payments based on issued policies.
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Insurer Obligations: Insurance companies must submit comprehensive policy details to the Insurance Authority within seven days following the end of each month.
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Coordination & Oversight: A province-level coordination committee will oversee program operations, while joint monitoring will be conducted by the Ministry, the Insurance Authority, the Department of Agriculture, the Department of Livestock Services, and provincial agencies to ensure effective grant utilization.
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Covered Commodities: Schedule-1 of the procedure outlines eligible crops and produce, including paddy, food crops, vegetables, tea, mushrooms, dragon fruit, ginger, cardamom, coffee, sugarcane, and various fruits such as apples, oranges, kiwi, mangoes, bananas, lemons, and walnuts.
