Improving Farmers'Access to Agricultural Insurance in India

22 Pages Posted: 20 Apr 2016

See all articles by Olivier Mahul

Olivier Mahul

World Bank - Financial Sector Development

Niraj Verma

affiliation not provided to SSRN

Daniel Clarke

University of Oxford

Date Written: March 1, 2012

Abstract

India's crop insurance program is the world's largest with 25 million farmers insured. However, issues in design, particularly related to delays in claims settlement, have led to 95 million farmer households not being covered, despite significant government subsidy. To address this and other problems, the Government of India is piloting a modified National Agricultural Insurance Scheme, a market-based scheme with involvement from the private sector. Compared with the existing scheme, the new program has a design that can offer more timely, claim settlement, less distortion in the allocation of government subsidies and cross-subsidies between farmer groups, and reduced basis risk. Implementation and technical challenges lie ahead which can be addressed but will require a comprehensive strategy, innovative solutions, and timely roll out. This paper describes and analyzes both programs, and discusses lessons learned in developing and implementing the new program.

Keywords: Hazard Risk Management, Insurance & Risk Mitigation, Climate Change Economics, Debt Markets, Emerging Markets

Suggested Citation

Mahul, Olivier and Verma, Niraj and Clarke, Daniel, Improving Farmers'Access to Agricultural Insurance in India (March 1, 2012). World Bank Policy Research Working Paper No. 5987. Available at SSRN: https://ssrn.com/abstract=2016752

Olivier Mahul (Contact Author)

World Bank - Financial Sector Development ( email )

Washington, DC 20433
United States

Niraj Verma

affiliation not provided to SSRN

Daniel Clarke

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

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