Potential of Livestock Takaful in Pakistan: An Empirical Study

Livestock TAKAFUL has emerged as Shariah compliant alternate to conventional livestock insurance. The focus of the study is to access the demand for the livestock TAKAFUL in Pakistan. Livestock sector is considered the backbone of the economy contributing 11.8% of GDP. Pakistan is the fourth largest milk producing country in all over the world, but here, still 2 to 3 percent of milk are processed and the production of milk was 4.94 Million Tones. In 2013-14 it increased to 5 Million Tones and recently in 2014-15, it further increased up to 5.26 Million Tones. Punjab is an abundant province in milk production. It is engaging significant portion of population of the country. Livestock insurance confronts with different types of risks faced by the farmers like shortage of flood, heavy rainfall, earthquake and other natural disasters. The purpose of Livestock insurance is to be used to mitigate risk. Insurance or Livestock insurance is still prohibited by Shariah scholars as elements of Riba, Gambling, Gharar and Qimar. A sample survey of 250 dairy farmers were conducted between January to March 2015.