Building the Pales. Agr. insurnace - EU As part of piloting agricultural insurance products, ESDC will work on this key sub-component which is key to the potential commercialisation of, and introduction of the agricultural insurance system for both the insurance supplier (private insurance companies) and the insurance purchaser (SSPs), it is essential to introduce these products utilizing an incentivized  approach. Their work entails (i) introducing SSPs to the farm’s best practices and risk cycle management, (ii) identification of and preparation of farms against climate change risks, (iii) familiarising SSPs to the concept and burden of insurance premium, (iv) introduce farmers to variouscredit receiving schemes within the Palestinian financial system, at the same time (v) familiarising thePalestinian government of the financial implications of agricultural insurance (financial capitalisation), including premium subsidies and its entailed capitalisation.

Thus, the below five inter-linked steps will be co-managed and implemented by ESDC.These steps are essential for the successful piloting of agricultural insurance products and raising awareness of the entire insurance system. It also ensures the gradual bearing of insurance premiums, preparedness requirements, and costs that are pre-requisites of insurance policy issuance as the caseof any other insurance product. It worth mentioning that premium subsidy is a world-wide practice by holding governments, as it is related to state-levelled capacity against natural disasters and climate risks.

The five implementation steps under this activity are:
• Develop booklets on 1) minimum acceptable agricultural specification 2) agricultural best practices and 3) farm risk management practices of certain agricultural establishments related to the launched/piloted products.
• Conduct training and capacity sharingactivities for SSPs/potential policyholders on the specifications, best practices, and farm risk management. The training will cover insurance practitioners’ staff to expand knowledgeand enhance underwriting decision making. Furthermore, financial mainstreaming trainings and outreach activities are anticipated to introduce farmers to available financing mechanisms and schemes within the banking, MFIs and PACI systems. This will support farmers to think of and target financing of operational activities  as well as finance any farm enhancement requirements that may be requested for agricultural insurance eligibility.
• Provide cost share (subsidise) of up to 35% of annual/cycle insurancepremium in full cooperation with the insurance company/ies, in addition to the subsidy provided by the Palestinian Government. This activity is essential and is required to decrease risks (as a pilot/model – to scale up investments).
• Develop outreach materials and presentations for the piloted products.
• Plan and implement targeted promotional and awareness-raising campaigns.

As explained  in section ii. Target groups, final beneficiaries, stakeholders, and co-applicants, the maximum of the 35% subsidy will not replace nor substitute the 20-30% government subsidy, but complements it to ensure affordability of the insurance products by combining the subsidy by both the government and the project during the pilot phase. Beyond this action, and based on PADRRIF’s plans, the Palestinian government plans to capitalise for the full premium subsidy in the percentages to be enumerated as per the newly developed insurance system.

All above described trainings, extension services, and awareness raising activities are relating to Palestine’s NDC implementation plan on climate-smart agriculture, specifically Output 2: Promote Conservation agricultural best practices and businesses, and Output 3: Scaling up sustainable community-managed irrigation schemes,resilient infrastructure and businesses to improve food and water security and resilience of vulnerable communities. More specifically, this action is aligned with Activity 3 of the NDC CSA on capacity building: (a) identifying appropriate technologies, tools and techniques of CSA, (b) assessing farmers’ indigenous and captured knowledge, (c) increasing capacity and technology transfer, and (d) training farmers on CSA technologies.