Project title: Agricultural Insurance in India : Problems and Prospects

Project leader :  Dr. S. S. Raju

Project team :  Dr. Ramesh Chand

Background:

The need to protect farmers against high fluctuations in yields and prices in agriculture has been a continuing concern of agricultural policy. In India, agricultural Insurance is one of the instruments for protecting farmers from wide agricultural variability. The coverage under various agricultural insurance schemes has been low in the past. The study aims at identifying various problems and prospects of agricultural insurance in India, and suggesting an effective implementation of agricultural insurance programme in India.

Objectives:

1.    To estimate price / yield risk involved in different crops in different regions of the country

2.    To examine the performance of the existing and earlier national agricultural insurance schemes implemented in India

3.    To discuss  and explore the problems and prospects of agriculture insurance in the country

4.    To look into the role of government in implementing various agricultural insurance schemes

5.    To suggest effective agriculture insurance programme in India

Study area:

The study estimates risk associated with crop production and studies various aspects of crop insurance at national level and taking Andhra Pradesh as a case at the disaggregate level.

Methodology:

1.    Instability index to estimate risk associated with agriculture and various crops

2.    Key informant interviews of  NAIS officials

3.    Primary data collection from 150 farmers in the district of Vijayanagaram representing rainfed typology and West Godavari district representing irrigated typology.

Key findings:

1.    The insurance coverage in terms of area, farmers and value of agricultural output  is very small

2.    Payment of indemnity based on area approach does not consider the affected farmers outside the compensated area, and most of the schemes are not viable

3.    Need for providing governmental financial support to agriculture insurance schemes

Funding agency: NCAP