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Crop insurance in India: Reaching the Unreached

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by Pramod Aggarwal, CGIAR Program on Climate Change, Agriculture, and Food Security. Presented at seminar on Insuring the future of farmers under climate change. London, UK. 28 January 2015. Learn more: http://ccafs.cgiar.org/weather-index-based-insurance

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Crop insurance in India: Reaching the Unreached

  1. 1. Crop insurance in India: Reaching the Unreached Pramod Aggarwal CGIAR Program on Climate Change, Agriculture, and Food Security
  2. 2. Progress of Crop Insurance In India 0 5 10 15 20 25 30 35 40 45 50 1980 1985 1990 1995 2000 2005 2010 2015 Year No of farmers, million Area covered, million ha Insured  farmers,    19%   Uninsured  farmers,     81%  
  3. 3. Top 10 reasons for dissatisfaction in unsatisfied index-insured farmers* 26.8 29.8 33.8 37.3 44.3 45.3 53.3 56.5 56.5 80.8 0 20 40 60 80 100 Types of Risks Covered Period of Risk Coverage Time Delay in Claim Settlement Explanation on WBCIS Policy Quantum of Sum Assured Responsiveness of Intermediary Resolution of Queries Mechanisms for Grievance Redress Convenience in Enrollment Location of Weather Station *Source: AFC, GOI, 2011
  4. 4. Farmer’s main suggestions for improving crop insurance •  Insurance literacy: Greater understanding of crop insurance programs •  Product design: easy to understand and site specific •  Site-specific data: weather, crop-cutting samples for yield loss assessment *Source: AFC, GOI, 2011
  5. 5. •  Further standardization of products based on agronomic and statistical principles to support robust actuarial design and pricing: AEZ specific Atlas Scaling out crop insurance in India Improved product design
  6. 6. •  Bundling with other risk management initiatives such as drought/flood tolerant varieties, water management practices- climate smart villages •  Double trigger products •  Bundling with disaster relief/ management Scaling out crop insurance in India Products for comprehensive risk management
  7. 7. Scaling out crop insurance in India Engaging farmers in product design and MRV
  8. 8. •  Huge penetration of smartphones/tablets •  Rural service centres •  Online policies and enrollment •  Crowd sourcing of farmers practices and digital images of crops •  Cloud computing of losses •  Continuous feedback to all stakeholders •  Direct benefits transfer- 115 million bank accounts for poor in 6 months •  Linkages with other schemes such as agro-advisories Scaling out crop insurance in India ICT solutions
  9. 9. Scaling out index insurance in India Improved targeting 1 dot = 25000 ha Source: IMD gridded data 1981 to 2011
  10. 10. Summary Scaling-out crop insurance: Key actions 1.  Improved insurance literacy 2.  Comprehensive risk management solutions: integrating insurance with other approaches 3.  Engaging farming communities in product designing and MRV 4.  ICT for scaling out, farmers participation, and for quick settlement of claims.

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