Improving farmers'access to agricultural insurance in India

Daniel Clarke, Olivier Mahul and Niraj Verma

No 5987, Policy Research Working Paper Series from The World Bank

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 (search for similar items in EconPapers)
Date: 2012-03-01
New Economics Papers: this item is included in nep-agr, nep-env, nep-ias and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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