Concept Note on Farm Income Insurance: Issues and Way Forward

Save this PDF as:
Size: px
Start display at page:

Download "Concept Note on Farm Income Insurance: Issues and Way Forward"

Transcription

1 Farm Income Insurance India, an agrarian economy with 1/3 rd population depending on the agriculture sector directly or indirectly has ~ 116 million farm holdings covering an area of 163 million hectares of which small and marginal farmers (with holdings of 2 hectares or less) make up 80 per cent of the producer population. Farming is an inherently risky business and farmers face many types of risks. The two most important risks that farmers face are: 1. Yield Risk and 2. Price Risk Yield Risk: - Agriculture, in India is heavily dependent on monsoon, which at times is uncertain. About 60 per cent of net sown area of the country is rain-fed and 65% of Indian farmers depend on rain-fed irrigation. The growth of crops and realization of output are determined by the quantum of rainfall and its distribution during the monsoon season. Rainfall pattern affects the irrigated crops also. Nearly 2/3 rd of the cropped acreage in India is vulnerable to drought in different degrees. This leads to operating risk in cultivation of different crops. On an average 12 million hectares of crop area is affected annually by these calamities severely impacting the yields and total agricultural production. Immemorial weather has been the major adversary that the farmers are not able to control. Price Risk:- Price or market risk refers to uncertainty about the prices farmers will receive for commodities or the prices they must pay for inputs. Revenue depends on production, prices, and interactions between the two. Prices received by farmers depend largely on global market conditions, while yields depend on localized factors, such as weather. The nature of price risk varies significantly from commodity to commodity. Price of Commodity and Yield of Commodity are inversely related i.e., when yield and aggregate production of a commodity increase, price decreases; when yield falls, price rises. The price-yield relationship, measured by the price-yield correlation, tends to be strongest in areas where most farm-level yields are closely related to area-wide production 0 P a g e

2 and where the area s production normally accounts for a significant share of world production. Aspects of Financial Risk:- 1. Borrowing money for farm business & repaying debt 2. Rising interest rates 3. Prospect of loans being called by lenders 4. Restricted credit availability Farmers find they are unable and to some extent unwilling to pay interest on their crop loans in a drought year and seek to reschedule principal repayments. Institutional risk: - Institutional risk results from uncertainties surrounding government actions. Government decisions that can have a major impact on the farm business are:- 1. Tax laws 2. Regulations for chemical use 3. Rules for animal waste disposal 4. Level of price or income support payments Thus, revenue variability across farms is largely the result of yield variability and differences in the relationship between prices and individual farm-level yields. The ultimate impact is seen in the form of high inflation and low gross domestic product growth (Agriculture contributes around 14 per cent to the Indian economy). With every one per cent deficit in rains, the country's Gross Domestic Product (GDP) falls by 0.35 per cent. 51% of farmers in India have no bank account and are financially excluded. De-risking smallholder farmers is of paramount interest and to cover the risk which may occur in future, there is need to have some provision and crop insurance is only mechanism available to safeguard against production risk in agriculture. Farmers, like other business people, are responsible for managing risks that will occur from year to year. Uncertain weather conditions, market shifts, and other events beyond a farmer s control affect farm yields and commodity prices, creating variability in farm revenue. When extreme events 1 P a g e

3 happen which are uninsurable simply because there is no insurance cover offered there may be both a moral and economic argument. Government of India (GoI) has introduced several crop insurance schemes over the past three decades. After experimenting with pilot schemes; individual farm based, which had adverse claim ratio and area based with voluntary participation provision, the Government introduced the first nationwide area yield guarantee insurance scheme in 1985 named Comprehensive Crop Insurance Scheme (CCIS), which was compulsory for loanee farmers. In 1999, it was replaced by National Agricultural Insurance Scheme (NAIS), expanding the coverage base and introducing additional features. It was further improved and a pilot Modified NAIS (MNAIS) scheme was introduced in Rabi Apart from this a Weather Index Based Crop Insurance Scheme (WBCIS) was also launched as a pilot scheme in Kharif Coconut Palm Insurance Scheme (CPIS) was also implemented on pilot basis from in 8 states. Recently, GoI has approved National Crop Insurance Programme (NCIP) for implementation throughout the country from Rabi by merging MNAIS, WBCIS and CPIS. A brief note about some of the schemes are as follows:- National Agricultural Insurance Scheme (NAIS): Operates on the basis of area-based crop insurance mechanism with the goal of providing a farm safety net and the development of the agricultural sector. NAIS protects yields against unavoidable perils such as but not limited to: drought, heat, hail, excess moisture, frost, freeze, insects, etc. NAIS coverage is offered only for food crops (cereals, millet and pulses) and selected annual commercial crops, potentially representing in excess of 90% of the total cropped area in the country. Approximately 15% of India s cropped area is insured under NAIS and over 65% of NAIS participants are small or marginal farmers. However, the NAIS doesn t offer any income assurance to farmers against the price fluctuations. 2 P a g e

4 Unfortunately, NAIS suffered low acceptability among the farmers due to reasons such as large unit area of insurance, unattractive threshold yield and indemnity level, delay in claims settlement and non-coverage of risk of pre-sowing and post harvesting losses. In addition, due to occurrence of natural calamities such as drought, flood, cyclone, pest, diseases etc. in different parts of the country; funds-requirement for scheme is unpredictable and unexpected, which cannot be planned / assessed correctly. Modified National Agricultural Insurance Scheme (MNAIS): Implemented on pilot basis to overcome the shortcomings in the NAIS. Use yield as an index to arrive at the loss experienced and the compensation payable. Unit area of insurance was reduced and private-sector participation was introduced to create a competitive crop insurance environment. More proficient basis for calculation of threshold yield was introduced (average yield of last 7 years excluding up to two years of declared national calamity) Individual assessment of claims in case of specified localized calamities Uniform seasonality norms for both loanee and non-loanee farmers Farm Income Insurance Scheme (FIIS): FIIS was introduced by Government of India during on pilot basis in 22 districts of 14 states, which was later discontinued. This scheme was envisaged to address both yield risk and price risk so as to stabilize farmers incomes. It, however, focused on income with respect to individual crops, and not on farm income. The scheme used area approach for actual yield and price measurement. If the actual income of the farmer falls short of the guaranteed income (i.e., product of average yield and minimum support price), they would be eligible for compensation to the extent of indemnity. The scheme covered mainly paddy and wheat crops. The scheme observed low participation of farmers. The reasons being: 3 P a g e

5 Farmer were not benefitted adequately due to off-setting behavior of yield and price. Unattractive guaranteed income, high premium rates, not covering risky crops like oilseeds / pulses were the reasons for low participation. Weather Based Crop Insurance Scheme (WBCIS): WBCIS is a unique weather based insurance product designed to provide insurance protection against losses in crop yield resulting from adverse weather incidences including deficit and excess rainfall, high or low temperature, humidity etc. The pilot WBCIS was based on actuarial rates of premium. To make the scheme attractive, premium charged was at par with NAIS. Under this scheme onion, tomato, chillies, gherkins, tapioca, turmeric, banana, jasmine, rose, tuberose and grapes are been covered presently. A compressive Revenue Assurance (RA) / Income Protection (IP) plan is thus required which protects the farmers against revenue losses (i.e., yield multiplied by price) caused by declines in either yields or prices. Under the Revenue Insurance scheme farmers can purchase crop insurance to reduce yield and/or price risk. Benefits of Revenue Insurance:- 1. Revenue insurance can be more effective at stabilizing income than insurance plans or farm programs that protect against yield and price risks separately or that provide fixed-income transfers. 2. A revenue-based program may also offer a simple way of assisting a wider variety of farms than programs linked to current or historical production of particular commodities, a practice that focuses risk management support only on certain segments of the farm sector. 3. Revenue insurance plans are designed to match costs of risk protection with benefits and to base coverage on the market value of the item insured. 4. Revenue insurance will help reduce the revenue risk and enhance the possibilities for farmers to increase productivity to offset negative terms of trade trends. 4 P a g e

6 Challenge:- 1. The challenge for the Government and Private Insurance companies operating in the Agriculture Insurance space and who are willing to offer new Farm Income / Revenue protection schemes will be to device a mechanism to fix the reference price to calculate the insurance amount (for e.g. take the average of the last seven years of a farmer's income) and offer insurance for that amount. One main characteristic of most of the USA insurance products which offer some price risk protection is that the reference price is the futures markets price, and mainly, the guaranteed price is that predicted by the futures market. So, they provide coverage against the oscillation of the price within the year. 2. Government will also need to ascertain that who will bear the cost of the premium. If it will be paid by the government, the liability on the Government will increase assuming the Government plans to continue with all the existing subsidies that are provided to farmers. The revenue-based insurance model may also utilize revenue and expense history calculation to conduct an assessment of the estimated costs that Insurance companies will replace in the event of a peril generally the full cash cost of production, including seed, chemical, fertilizer, interest and overheads will be made available in the form of coverage to growers. Given this scenario, the private insurance players, also need to expand the farm insurance cover. Self-model of crop insurance should cover claims, administrative costs and also generate surplus to absorb catastrophic losses. There is a need to introduce innovative insurance products covering different risks to be introduced in place of multiperil crop insurance. As in USA, it would be prudent if the expected revenue from the crop is insured. This would help farmers to manage consumption needs in event of crop failure. India needs a breakthrough crop income and revenue insurance-based program that will provide a revolutionary new way for farming families to recover their business and production costs of their cropping enterprise when weather related disaster strikes. It is important that the Insurance scheme provides a secure insurance solution to the farmers by transferring risk from the farm to the insurance industry that financially supports the 5 P a g e

7 program, thus providing farming families with access to vast amounts of working capital when they need it most and offering a comforting level of security. The Income Protection / Revenue Assurance schemes will help de-risking the small holder farmer and will help protect their incomes by integrating production with prices. A national adoption of revenue insurance would create opportunities for the top-performing farms to continue to grow, offering a demonstrator effect to other farming communities and increasing the likelihood of success across the country. It would also allow farmers to confidently undertake succession planning, consider opportunities around scale and generate diversity of production. 6 P a g e

A brief and Developments. Pankaj Kumar Tewari Deputy Director, IRDA

A brief and Developments. Pankaj Kumar Tewari Deputy Director, IRDA A brief and Developments Pankaj Kumar Tewari Deputy Director, IRDA 1 Disclaimer The views expressed in this presentation are my own views and do not in any way reflect the views of the Authority on any

More information

Agriculture Insurance Company of India Limited (AIC)

Agriculture Insurance Company of India Limited (AIC) Q1: What is Insurance? WEATHER BASED CROP INSURANCE SCHEME FREQUENTLY ASKED QUESTIONS (FAQS) Insurance is a tool to protect you against a small probability of a large unexpected loss. It is a technique

More information

CROP INSURANCE IN INDIA

CROP INSURANCE IN INDIA LOK SABHA SECRETARIAT PARLIAMENT LIBRARY AND REFERENCE, RESEARCH, DOCUMENTATION AND INFORMATION SERVICE (LARRDIS) MEMBERS REFERENCE SERVICE REFERENCE NOTE. No. 17 /RN/Ref./ November /2014 For the use of

More information

Piloting innovation led transformation in Indian agriculture insurance

Piloting innovation led transformation in Indian agriculture insurance Piloting innovation led transformation in Indian agriculture insurance 13/11/2014 Agenda Indian Agriculture Landscape Indian Agriculture Insurance Schemes Implementation Stake Holders View Overall Challenges

More information

Presentation on Crop Insurance by P. Nagarjun Ex. General Manager AIC Technical Consultant / OSD, Department of Agri. Govt. of A.P.

Presentation on Crop Insurance by P. Nagarjun Ex. General Manager AIC Technical Consultant / OSD, Department of Agri. Govt. of A.P. Presentation on Crop Insurance by P. Nagarjun Ex. General Manager AIC Technical Consultant / OSD, Department of Agri. Govt. of A.P. Indian Agriculture Major causes of Damage Drought / Dry Spell Heavy Rains

More information

COMPARISON BETWEEN NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS), MODIFIED NAIS AND WBCIS PARAMETER NAIS MNAIS WBCIS

COMPARISON BETWEEN NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS), MODIFIED NAIS AND WBCIS PARAMETER NAIS MNAIS WBCIS REVISED COMPARISON BETWEEN NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS), MODIFIED NAIS AND WBCIS S. No. PARAMETER NAIS MNAIS WBCIS 1 Insurance Unit Scheme provided for reduction of unit to Village Panchayat

More information

EXPERIENCES WITH CROP INSURANCE IN INDIA

EXPERIENCES WITH CROP INSURANCE IN INDIA EXPERIENCES WITH CROP INSURANCE IN INDIA Risks and Agricultural Insurance Evolution Insurance in India Performance of Yield and Weather Index Based Insurance Gap Between Supply and Demand for Insurance

More information

^mavr` ~r_m {d{z`m_h$ Am a {dh$mg àm{yh$au INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA. ^ ~r {d {d à. Crop Insurance

^mavr` ~r_m {d{z`m_h$ Am a {dh$mg àm{yh$au INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA. ^ ~r {d {d à. Crop Insurance m m ^ ~r {d {d à ^mavr` ~r_m {d{z`m_h$ Am a {dh$mg àm{yh$au INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA Crop Insurance Contents: 1. About this handbook 1 2. Crop Insurance 2 3. Frequently Asked

More information

National Agricultural Insurance Scheme (NAIS) (Rashtriya Krishi Bima Yojana - RKBY)

National Agricultural Insurance Scheme (NAIS) (Rashtriya Krishi Bima Yojana - RKBY) National Agricultural Insurance Scheme (NAIS) (Rashtriya Krishi Bima Yojana - RKBY) Objectives The objectives of the NAIS are as under:- 1. To provide insurance coverage and financial support to the farmers

More information

4. EVOLUTION OF CROP INSURANCE SCHEMES IN INDIA

4. EVOLUTION OF CROP INSURANCE SCHEMES IN INDIA 4. EVOLUTION OF CROP INSURANCE SCHEMES IN INDIA 4.1 GENESIS OF CROP INSURANCE SCHEMES IN INDIA What a great achievement for Crop Insurance in India i.e. 250 farmers covered in first ever scheme in 1972

More information

Index Insurance in India

Index Insurance in India Index Insurance in India Kolli N Rao, PhD Aon Benfield, India Indian Agriculture & Risks What s Index Insurance? Why Index Insurance? The Outline Architecture of Indian Crop Insurance Coverage: The Numbers

More information

NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS) - A NOVEL CROP INSURANCE SCHEME

NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS) - A NOVEL CROP INSURANCE SCHEME NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS) - A NOVEL CROP INSURANCE SCHEME Q 1 : What is insurance? Ans: Insurance is a fiancial arrangement whereby losses suffered by a few are met from the funds accumulated

More information

Insurance environment in India: Bottlenecks and opportunities for a cost effective insurance products. Srinivasa Rao Gattineni

Insurance environment in India: Bottlenecks and opportunities for a cost effective insurance products. Srinivasa Rao Gattineni Insurance environment in India: Bottlenecks and opportunities for a cost effective insurance products Srinivasa Rao Gattineni Rainfall variability is dominant due to the presence of the Monsoon (seasonal

More information

CROP INSURANCE IN INDIA - A BRIEF REVIEW

CROP INSURANCE IN INDIA - A BRIEF REVIEW Pinnacle Research Journals 20 CROP INSURANCE IN INDIA - A BRIEF REVIEW VISHITA KHANNA*; KEYUR UPADHYAY**; HARSHIL GANDHI*** ABSTRACT *International Agribusiness Management Institute, **International Agribusiness

More information

Deficit Rainfall Insurance Payouts in Most Vulnerable Agro Climatic Zones of Tamil Nadu, India

Deficit Rainfall Insurance Payouts in Most Vulnerable Agro Climatic Zones of Tamil Nadu, India Deficit Rainfall Insurance Payouts in Most Vulnerable Agro Climatic Zones of Tamil Nadu, India S.Senthilnathan, K.Palanisami, C.R.Ranganathan and Chieko Umetsu 2 Tamil Nadu Agricultural University, Coimbatore,

More information

Crop Insurance in India

Crop Insurance in India Crop Insurance in India - Agriculture Insurance Company of India Limited (AIC) Crop Insurance - Earlier attempts: The idea of crop insurance emerged in India during the early part of the twentieth century.

More information

Improving farmers access to agricultural insurance in India

Improving farmers access to agricultural insurance in India International Microinsurance Conference Learning Sessions Daniel Clarke Improving farmers access to agricultural insurance in India 30 June 2011 2010 The Actuarial Profession www.actuaries.org.uk Background:

More information

CHAPTER 2 AGRICULTURAL INSURANCE: A BACKGROUND 9

CHAPTER 2 AGRICULTURAL INSURANCE: A BACKGROUND 9 CHAPTER 2 AGRICULTURAL INSURANCE: A BACKGROUND 9 Chapter 2: AGRICULTURAL INSURANCE: A BACKGROUND In Chapter 1 we saw that insurance is one of the tools that farmers and other stakeholders can use to manage

More information

Traditional Products. The two Traditional Crop Insurance Products are: Named Peril Crop Insurance (NPCI) Multi Peril Crop Insurance (MPCI)

Traditional Products. The two Traditional Crop Insurance Products are: Named Peril Crop Insurance (NPCI) Multi Peril Crop Insurance (MPCI) Traditional Products Traditional crop insurance relies on the principle of indemnity, where losses are measured in the field either after the event (named peril crop insurance) or through yield measurement

More information

Comparison of different crop insurance models in Nepal. Sunil K. Singh Senior Agriculutural Economist, MoAD

Comparison of different crop insurance models in Nepal. Sunil K. Singh Senior Agriculutural Economist, MoAD Comparison of different crop insurance models in Nepal Sunil K. Singh Senior Agriculutural Economist, MoAD 1 Outline of Presentation Introduction Risk in Agriculture Tools and technique for minimizing

More information

Crop Insurance in India

Crop Insurance in India INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD INDIA Crop Insurance in India Gurdev Singh W.P. No. 2010-06-01 June 2010 The main objective of the working paper series of the IIMA is to help faculty members,

More information

Role of Government in Agriculture Risk Mitigation & Expansion of Insurance in India

Role of Government in Agriculture Risk Mitigation & Expansion of Insurance in India Role of Government in Agriculture Risk Mitigation & Expansion of Insurance in India Kolli N Rao 4 th October 2015 0 OVERVIEW India: The Agriculture Setting India: Agriculture Insurance Architecture Agriculture

More information

CURRENT ISSUES ON CROP INSURANCE IN CAUVERY DELDA REGION-AN OVERVIEW

CURRENT ISSUES ON CROP INSURANCE IN CAUVERY DELDA REGION-AN OVERVIEW CURRENT ISSUES ON CROP INSURANCE IN CAUVERY DELDA REGION-AN OVERVIEW Dr. FRANK RATHANA KUMAR Associate Professor and Research Advisor, Department of Cooperation, TBML College, Porayar -609 307, Tamilnadu

More information

Terms of Reference for consultants

Terms of Reference for consultants Terms of Reference for consultants The consultants for the proposed TA will largely comprise actuaries, underwriters and data analysts with relevant experience in crop insurance and their expertise will

More information

THE COMMODITY RISK MANAGEMENT GROUP WORLD BANK

THE COMMODITY RISK MANAGEMENT GROUP WORLD BANK THE COMMODITY RISK MANAGEMENT GROUP WORLD BANK Agricultural Insurance: Scope and Limitations for Rural Risk Management 5 March 2009 Agenda The global market Products Organisation of agricultural insurance

More information

CHALLENGES IN IMPLEMENTING AGRICULTURE INSURANCE AND RE-INSURANCE IN DEVELOPING COUNTRIES

CHALLENGES IN IMPLEMENTING AGRICULTURE INSURANCE AND RE-INSURANCE IN DEVELOPING COUNTRIES 14 THE JOURNAL CHALLENGES IN IMPLEMENTING AGRICULTURE INSURANCE AND RE-INSURANCE IN DEVELOPING COUNTRIES Paper Presented at ICDC By: Shri R. C. A. Jain Secretary, Ministry of Agriculture & Cooperation,

More information

Managing Risk With Revenue Insurance

Managing Risk With Revenue Insurance Managing Risk With Revenue Insurance VOLUME 4 ISSUE 5 22 Robert Dismukes, dismukes@ers.usda.gov Keith H. Coble, coble@agecon.msstate.edu Comstock 10 Crop revenue insurance offers farmers a way to manage

More information

Mitigating catastrophic risk in Australian agriculture

Mitigating catastrophic risk in Australian agriculture Australia s Leader in MPCI Mitigating catastrophic risk in Australian agriculture Andrew Trotter, Latevo Outlook 2015 Conference Tuesday 3 rd March 2015. 1 Multi-Peril Crop Insurance is now working in

More information

JAMAICA. Agricultural Insurance: Scope and Limitations for Weather Risk Management. Diego Arias Economist. 18 June 2009

JAMAICA. Agricultural Insurance: Scope and Limitations for Weather Risk Management. Diego Arias Economist. 18 June 2009 JAMAICA Agricultural Insurance: Scope and Limitations for Weather Risk Management Diego Arias Economist 18 June 2009 Financed partly by the AAACP EU Support to the Caribbean Agenda The global market Products

More information

National Agricultural Insurance Scheme (NAIS)

National Agricultural Insurance Scheme (NAIS) Proceedings of the State Level Advisory Committee meeting to monitor, supervise and advise in matters relating to adequacy and quality of crop cutting experiments on Crop Insurance held under the Chairmanship

More information

Rain on Planting Protection. Help Guide

Rain on Planting Protection. Help Guide Rain on Planting Protection Help Guide overview Rain on Planting Protection allows growers to protect themselves from losses if rain prevents planting from being completed on schedule. Coverage is highly

More information

Improving Farmers Access to Agricultural Insurance in India

Improving Farmers Access to Agricultural Insurance in India Public Disclosure Authorized Policy Research Working Paper 5987 WPS5987 Public Disclosure Authorized Public Disclosure Authorized Improving Farmers Access to Agricultural Insurance in India Olivier Mahul

More information

Federal Crop Insurance: The Basics

Federal Crop Insurance: The Basics Federal Crop Insurance: The Basics Presented by Shawn Wade Director of Communications Plains Cotton Growers, Inc. 4517 West Loop 289 Lubbock, TX 79414 WWW.PLAINSCOTTON.ORG Why Federal Crop Insurance? Every

More information

FACT SHEET. Production Risk

FACT SHEET. Production Risk ALABAMA AGRICULTURAL & MECHANICAL UNIVERSITY SMALL FARMERS RESEARCH CENTER FACT SHEET Production Risk Any production related activity or event that is uncertain is a production risk. Agricultural production

More information

We have seen in the How

We have seen in the How : Examples Using Hedging, Forward Contracting, Crop Insurance, and Revenue Insurance To what extent can hedging, forward contracting, and crop and revenue insurance reduce uncertainty within the year (intrayear)

More information

Agriculture Insurance Company of India (AIC)

Agriculture Insurance Company of India (AIC) Agriculture Insurance Company of India (AIC) Pilot Weather Based Crop Insurance Scheme The Weather Based Crop Insurance Scheme intended to provide insurance protection to the cultivator against adverse

More information

Government vs Weather The True Story of Crop Insurance in India

Government vs Weather The True Story of Crop Insurance in India Government vs Weather The True Story of Crop Insurance in India Jennifer Ifft Abstract The government of India started offering widespread crop in insurance in 1985, with the Comprehensive Crop Insurance

More information

Crop Insurance in Karnataka

Crop Insurance in Karnataka Crop Insurance in Karnataka Vijay Kalavakonda a and Olivier Mahul b a Financial Analyst, Financial Sector Operations and Policy Department, World Bank, Washington, D.C. b Senior Insurance Specialist, Financial

More information

Crop Insurance for Adaptation to Climate Change in India

Crop Insurance for Adaptation to Climate Change in India WORKING PAPERS Crop Insurance for Adaptation to Climate Change in India Mamata Swain ASIA RESEARCH CENTRE WORKING PAPER 61 Crop Insurance for Adaptation to Climate Change in India July 2014 Dr Mamata Swain

More information

The AIR Multiple Peril Crop Insurance (MPCI) Model For The U.S.

The AIR Multiple Peril Crop Insurance (MPCI) Model For The U.S. The AIR Multiple Peril Crop Insurance (MPCI) Model For The U.S. According to the National Climatic Data Center, crop damage from widespread flooding or extreme drought was the primary driver of loss in

More information

ALTERNATIVE MODEL FOR CROP INSURANCE A CASE OF ONION CROP (ALLIUM CEPA) Abstract

ALTERNATIVE MODEL FOR CROP INSURANCE A CASE OF ONION CROP (ALLIUM CEPA) Abstract International Conference On Applied Economics ICOAE 2010 85 ALTERNATIVE MODEL FOR CROP INSURANCE A CASE OF ONION CROP (ALLIUM CEPA) SAIKUMAR C. BHARAMAPPANAVARA 1, MALLIKARJUN S. HASANABADI 2, DR. JAYASHREE

More information

Good planning is good farming

Good planning is good farming Production Insurance Plan Overview New Forage Seeding Good planning is good farming Connecting producers with programs What you need to know about protecting your new forage seeding under Production Insurance.

More information

Micro Crop Insurance and Protecting the Poor Lessons From the Field

Micro Crop Insurance and Protecting the Poor Lessons From the Field Micro Crop Insurance and Protecting the Poor Lessons From the Field Aaron Oxley CTO, Micro Insurance Agency aaron.oxley@microinsuranceagency.com The Program Who are we an what do we do? Who are the poor?

More information

Agriculture Insurance in India

Agriculture Insurance in India June 2007 Centre for Insurance and Risk Management Working Paper Series Agriculture Insurance in India Sidharth Sinha 2 / SIDDHARTH SINHA DISCLAIMER The view, opinions, theories as may be contained herein

More information

CROP REVENUE COVERAGE INSURANCE PROVIDES ADDITIONAL RISK MANAGEMENT WHEAT ALTERNATIVES 1

CROP REVENUE COVERAGE INSURANCE PROVIDES ADDITIONAL RISK MANAGEMENT WHEAT ALTERNATIVES 1 Presented at the 1997 Missouri Commercial Agriculture Crop Institute CROP REVENUE COVERAGE INSURANCE PROVIDES ADDITIONAL RISK MANAGEMENT WHEAT ALTERNATIVES 1 Presented by: Art Barnaby Managing Risk With

More information

CROP INSURANCE FOR NEW YORK VEGETABLE CROPS

CROP INSURANCE FOR NEW YORK VEGETABLE CROPS CROP INSURANCE FOR NEW YORK VEGETABLE CROPS Multi-peril crop insurance is a valuable risk management tool that allows growers to insure against losses due to adverse weather conditions, price fluctuations,

More information

Multiple Peril Crop Insurance

Multiple Peril Crop Insurance Multiple Peril Crop Insurance Multiple Peril Crop Insurance (MPCI) is a broadbased crop insurance program regulated by the U.S. Department of Agriculture and subsidized by the Federal Crop Insurance Corporation

More information

AgriInsurance in Canada

AgriInsurance in Canada AgriInsurance in Canada Brad Klak, President and Managing Director Merle Jacobson, COO, Operations Division Agriculture Financial Services Corporation Alberta, Canada Agriculture in Canada Total Cash Receipts

More information

Improving the Efficiency of Agricultural Insurance Markets: Policy Experiences

Improving the Efficiency of Agricultural Insurance Markets: Policy Experiences 1 Risk Management in Agriculture: Towards Effective Policies OECD Workshop, Paris, November 22-23, 2010 Improving the Efficiency of Agricultural Insurance Markets: Policy Experiences Olivier Mahul Program

More information

Agricultural Insurance in India Problems and Prospects

Agricultural Insurance in India Problems and Prospects NCAP Working Paper No. 8 Agricultural Insurance in India Problems and Prospects S.S. Raju and Ramesh Chand National Centre for Agricultural Economics and Policy Research (Indian Council of Agricultural

More information

Challenging the limitations.

Challenging the limitations. Genesis Existing schemes Road ahead INDEX BASED CROP INSURANCE: Challenging the limitations. Dr. Reshmy Nair, Associate Professor ASCI, Hyderabad CROP INSURANCE IN INDIA 1 PRESENTATION PLAN Crop Insurance

More information

4. Existing agricultural insurance systems in the World

4. Existing agricultural insurance systems in the World 4. Existing agricultural insurance systems in the World 4.1 Definitions of agricultural insurance schemes Single-risk insurance: Single-risk insurance covers against one peril or risk, e.g. hail. Combined

More information

insurance and weather derivatives are of the utmost importance.

insurance and weather derivatives are of the utmost importance. Agricultural Insurance in India: Approaches and Challenges Debdatta Pal, PhD student and Tamojit Mondal, PGP student Indian Institute of Management (IIM), Vastrapur, Ahmedabad, Gujarat E-mail: debdatta@iimahd.ernet.in

More information

Pasture, Rangeland, and Forage Insurance: A Risk Management Tool for Hay and Livestock Producers

Pasture, Rangeland, and Forage Insurance: A Risk Management Tool for Hay and Livestock Producers October 2012 Pasture, Rangeland, and Forage Insurance: A Risk Management Tool for Hay and Livestock Producers Monte Vandeveer, Otoe County Extension Educator University of Nebraska-Lincoln Institute of

More information

Group Risk Income Protection Plan added in Kansas for 2006 Wheat (Updated) 1

Group Risk Income Protection Plan added in Kansas for 2006 Wheat (Updated) 1 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial

More information

Rebecca Metzger, Sr. Industry Specialist June, 2014. Business Risk Management Programs grapes and grapevines

Rebecca Metzger, Sr. Industry Specialist June, 2014. Business Risk Management Programs grapes and grapevines Rebecca Metzger, Sr. Industry Specialist June, 2014 Business Risk Management Programs grapes and grapevines 1 BRM programs available to you Business Risk Management (BRM) There are may factors to deal

More information

A Study on Farmers Awareness, Perception and Willing To Join and Pay for Crop Insurance

A Study on Farmers Awareness, Perception and Willing To Join and Pay for Crop Insurance International Journal of Business and Management Invention ISSN (Online): 2319 8028, ISSN (Print): 2319 801X Volume 2 Issue 1 ǁ January. 2013ǁ PP.48-54 A Study on Farmers Awareness, Perception and Willing

More information

Agricultural Data and Insurance

Agricultural Data and Insurance Agricultural Data and Insurance Innovations in agricultural data development for insurance Background Insurance requires high quality data. From an insurance perspective data is high quality if it is timely

More information

4 th IAIS/A2ii Consultation Call Agricultural Insurance

4 th IAIS/A2ii Consultation Call Agricultural Insurance 4 th IAIS/A2ii Consultation Call Agricultural Insurance The following questions have been received during the 4 th IAIS-A2ii Consultation Call on Agricultural Insurance on June 26 th at 10am and 4pm and

More information

Prospects for Crop Insurance In Western Australia Greg Hertzler, Natasha van Heemst and Duane Collinson

Prospects for Crop Insurance In Western Australia Greg Hertzler, Natasha van Heemst and Duane Collinson Prospects for Crop Insurance In Western Australia Greg Hertzler, Natasha van Heemst and Duane Collinson University of Western Australia and Murdoch University Prospects for Crop Insurance In Western Australia

More information

Group Risk Income Protection Plan and Group Risk Plans added in New Kansas Counties for 2005 1 Updated 3/12/05

Group Risk Income Protection Plan and Group Risk Plans added in New Kansas Counties for 2005 1 Updated 3/12/05 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial

More information

Romania. Agricultural Insurance Alternatives

Romania. Agricultural Insurance Alternatives Romania Agricultural Insurance Alternatives Report from GlobalAgRisk, Inc Subcontractor for Noesis, Inc. 1 TECHNICAL ADVISORY SERVICES CONCERNING CROP INSURANCE LEGISLATION AND POLICY IN ROMANIA In Partial

More information

Annex 7. Fact Sheet Estonia

Annex 7. Fact Sheet Estonia Annex 7. Fact Sheet Estonia 1. Generalities: Some history of the agricultural risk and crisis management policies, programs and tools. Population: 1, 36 million inhabitants GDP 2004 9,4 billion Euro; Inflation

More information

Formal Insurance, Informal Risk Sharing, and Risk-Taking. A. Mushfiq Mobarak Mark Rosenzweig Yale University

Formal Insurance, Informal Risk Sharing, and Risk-Taking. A. Mushfiq Mobarak Mark Rosenzweig Yale University Formal Insurance, Informal Risk Sharing, and Risk-Taking A. Mushfiq Mobarak Mark Rosenzweig Yale University Background Formal insurance markets largely absent where they are needed 75% of the world s poor

More information

Learnings from Global Best Practices in Agriculture Insurance

Learnings from Global Best Practices in Agriculture Insurance Learnings from Global Best Practices in Agriculture Insurance Presented at IFPRI-IIDS Workshop on Best Practices in Agriculture Insurance in South Asia, at Kathmandu, Nepal Presented by: VIJAY SARDANA

More information

THE INVOLVEMENT OF GOVERNMENTS IN THE DEVELOPMENT OF AGRICULTURAL INSURANCE

THE INVOLVEMENT OF GOVERNMENTS IN THE DEVELOPMENT OF AGRICULTURAL INSURANCE International Journal of Economics, Commerce and Management United Kingdom Vol. III, Issue 6, June 2015 http://ijecm.co.uk/ ISSN 2348 0386 THE INVOLVEMENT OF GOVERNMENTS IN THE DEVELOPMENT OF AGRICULTURAL

More information

Chapter Five Insurance Participation and Input Usage

Chapter Five Insurance Participation and Input Usage Chapter Five Insurance Participation and Input Usage Empirical Evidence at Micro Level 5.1. Introduction In this chapter we have analyzed the effect of crop insurance on the three crops under study such

More information

Weather Index Crop Insurance. White Paper. Implementation, Product Design, Challenges And Successes Lessons Learned In The Field

Weather Index Crop Insurance. White Paper. Implementation, Product Design, Challenges And Successes Lessons Learned In The Field White Paper Weather Index Crop Insurance Implementation, Product Design, Challenges And Successes Lessons Learned In The Field By Shadreck Mapfumo, Vice President, Agriculture, MicroEnsure November 2008

More information

Common Format for Project/Program Concept Note for the Use of Resources from the PPCR Competitive Set-Aside (Round II)

Common Format for Project/Program Concept Note for the Use of Resources from the PPCR Competitive Set-Aside (Round II) Common Format for Project/Program Concept Note for the Use of Resources from the PPCR Competitive Set-Aside (Round II) 1. Country/Region: BOLIVIA 2. CIF Project ID#: 3. Project/Program Title: 4. Date of

More information

Agricultural Outlook Forum For Release: Monday, February 23, 1998 AGRICULTURAL RISK MANAGEMENT AND THE ROLE OF THE PRIVATE SECTOR

Agricultural Outlook Forum For Release: Monday, February 23, 1998 AGRICULTURAL RISK MANAGEMENT AND THE ROLE OF THE PRIVATE SECTOR Agricultural Outlook Forum For Release: Monday, February 23, 1998 AGRICULTURAL RISK MANAGEMENT AND THE ROLE OF THE PRIVATE SECTOR Joseph W. Glauber Deputy Chief Economist U.S. Department of Agriculture

More information

Canadian Direct Payment Farm Programs: 1981-2010

Canadian Direct Payment Farm Programs: 1981-2010 Canadian Direct Payment Farm Programs: 1981-2010 James Vercammen Sauder School of Business/Food and Resource Economics University of British Columbia Growing Our Future Policy Conference April 5, 2012

More information

Agricultural activities in Nattrampalli and Thirumangalam location Rainfed theme

Agricultural activities in Nattrampalli and Thirumangalam location Rainfed theme 5 Agricultural activities in Nattrampalli and Thirumangalam location Rainfed theme Indian Agriculture depends mostly on monsoons. The erratic and uneven distribution of monsoons has a direct bearing on

More information

A review of agricultural and monsoon conditions

A review of agricultural and monsoon conditions For the past 2 years India has experienced drought like conditions. This year the Indian Meteorological Department (IMD) has predicted that there will above normal monsoon. If monsoons this year are good,

More information

Risk Management for Greenhouse and Nursery Growers in the United States

Risk Management for Greenhouse and Nursery Growers in the United States Risk Management for Greenhouse and Nursery Growers in the United States Dr. Robin G. Brumfield, Specialist in Farm Management Dr. Edouard K. Mafoua, Research Associate in Agricultural Economics Rutgers,

More information

Agriculture Insurance Programs developed with PPP mechanisms case study of Europa Re

Agriculture Insurance Programs developed with PPP mechanisms case study of Europa Re IIF 2015 Property Insurance in a Stormy Era Munich, June 22-23 Agriculture Insurance Programs developed with PPP mechanisms case study of Europa Re Marijana Lemic-Saramandic, MSc Country Program Manager

More information

Repayment Capacity Sensitivity Analysis Using Purdue Farm Financial Analysis Spreadsheet

Repayment Capacity Sensitivity Analysis Using Purdue Farm Financial Analysis Spreadsheet Repayment Capacity Sensitivity Analysis Using Purdue Farm Financial Analysis Spreadsheet ABSTRACT Many agricultural producers purchased capital items the past few years and some used borrowed funds to

More information

Revised NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS) (RASHTRIYA KRISHI BIMA YOJANA-RKBY)

Revised NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS) (RASHTRIYA KRISHI BIMA YOJANA-RKBY) OBJECTIVES: Revised NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS) (RASHTRIYA KRISHI BIMA YOJANA-RKBY) The objectives of the NAIS are as under:- 1. To provide insurance coverage and financial support to

More information

The 2014 Farm Bill left the farm-level COM-

The 2014 Farm Bill left the farm-level COM- Current Crop Ag Decision Maker Insurance Policies File A1-48 The 2014 Farm Bill left the farm-level COM- BO products introduced by the Risk Management Agency in 2011 unchanged, but released the Area Risk

More information

SCHEDULE C FORAGE PRODUCTION PLAN

SCHEDULE C FORAGE PRODUCTION PLAN SCHEDULE C FORAGE PRODUCTION PLAN This Schedule C, Forage Production Plan forms an integral part of the PRODUCTION INSURANCE AGREEMENT and as such contains supplementary information specific to insurance

More information

Adaptive policy case study: weather-indexed insurance for agriculture in India

Adaptive policy case study: weather-indexed insurance for agriculture in India CHAPTER 4 Adaptive policy case study: weather-indexed insurance for agriculture in India 4.1 Introduction 4.2 Background 4.3 Policy description: evolution of crop insurance in India 4.3.1 Traditional crop

More information

6 TH GLOBAL CONFERENCE OF ACTUARIES FEBRUARY 18-19, 2004, NEW DELHI

6 TH GLOBAL CONFERENCE OF ACTUARIES FEBRUARY 18-19, 2004, NEW DELHI 6 TH GLOBAL CONFERENCE OF ACTUARIES FEBRUARY 18-19, 2004, NEW DELHI AGRICULTURAL INSURANCE IN INDIA-A PERSPECTIVE By Dr. A. Amarender Reddy Scientist (Agricultural Economics) Indian Institute of Pulses

More information

THE AGRICULTURAL PRODUCE (REMUNERATIVE SUPPORT PRICES AND MISCELLANEOUS PROVISIONS) BILL, 2012

THE AGRICULTURAL PRODUCE (REMUNERATIVE SUPPORT PRICES AND MISCELLANEOUS PROVISIONS) BILL, 2012 1 AS INTRODUCED IN LOK SABHA 5 THE AGRICULTURAL PRODUCE (REMUNERATIVE SUPPORT PRICES AND MISCELLANEOUS PROVISIONS) BILL, 2012 By DR. MAHENDRASINH P. CHAUHAN, M.P. A Bill No. 128 of 2012 BILL to provide

More information

DRAFT REPORT NOT FOR CIRCULATION. Nigeria. Crop Weather Index Insurance. Pre-Feasibility Study Report. November 2011. The World Bank THE WORLD BANK

DRAFT REPORT NOT FOR CIRCULATION. Nigeria. Crop Weather Index Insurance. Pre-Feasibility Study Report. November 2011. The World Bank THE WORLD BANK DRAFT REPORT NOT FOR CIRCULATION Nigeria Crop Weather Index Insurance Pre-Feasibility Study Report November 2011 The World Bank THE WORLD BANK Table of Contents Executive Summary... iii Context... iii

More information

PRELIMINARY FOCUS GROUP STUDY: AUSTRALIAN FARMER ATTITUDE TO ON-FARM RISK MANAGEMENT AND INSURANCE

PRELIMINARY FOCUS GROUP STUDY: AUSTRALIAN FARMER ATTITUDE TO ON-FARM RISK MANAGEMENT AND INSURANCE PRELIMINARY FOCUS GROUP STUDY: AUSTRALIAN FARMER ATTITUDE TO ON-FARM RISK MANAGEMENT AND INSURANCE Prepared by: Dr Jay Cummins, Mr Ashley Lipman, Ms Heather Feetham June 2014 Authors acknowledge that this

More information

Federal Crop Insurance: Background

Federal Crop Insurance: Background Dennis A. Shields Specialist in Agricultural Policy August 13, 2015 Congressional Research Service 7-5700 www.crs.gov R40532 Summary The federal crop insurance program began in 1938 when Congress authorized

More information

South East Europe and Caucasus Catastrophe Reinsurance Facility

South East Europe and Caucasus Catastrophe Reinsurance Facility South East Europe and Caucasus Catastrophe Reinsurance Facility By: Wael Zakout, Manager: Urban, Water and Disaster Management, Europe and Central Asia Region Background information The World Bank UNISDR

More information

Appendix A. A Nonstochastic Comparison of Price- and Revenue-Based Support

Appendix A. A Nonstochastic Comparison of Price- and Revenue-Based Support Appendix A. A Nonstochastic Comparison of Price- and Revenue-ased Support efore planting, the producer can only guess at harvested yields and harvesttime prices due to their stochastic nature (that is,

More information

Crop Insurance For Those Who Choose To Manage Risk

Crop Insurance For Those Who Choose To Manage Risk 2008 INSIDE: Crop Insurance For Those Who Choose To Manage Risk n Price And Weather Volatility Increase Risks n It Doesn t Cost To Ask n How To Evaluate Crop-Hail Insurance n Risk Management Checklist

More information

United Nations Economic and Social Commission for Asia and the Pacific

United Nations Economic and Social Commission for Asia and the Pacific Information Note ICT and Disaster Risk Reduction Division United Nations Economic and Social Commission for Asia and the Pacific Weather Insurance for Adaptation to Climate Risk: Emerging Trends from Asia

More information

Topic 7: Financial Performance

Topic 7: Financial Performance Topic 7: Financial Performance One of the most important tasks in transition planning is analyzing the financial performance of the farm operation. Too many farms move ahead making decisions regarding

More information

AGRICULTURAL SCIENCES Vol. II - Crop Production Capacity In North America - G.K. Pompelli CROP PRODUCTION CAPACITY IN NORTH AMERICA

AGRICULTURAL SCIENCES Vol. II - Crop Production Capacity In North America - G.K. Pompelli CROP PRODUCTION CAPACITY IN NORTH AMERICA CROP PRODUCTION CAPACITY IN NORTH AMERICA G.K. Pompelli Economic Research Service, U. S. Department of Agriculture, USA Keywords: Supply, policy, yields. Contents 1. Introduction 2. Past Trends in Demand

More information

Cash Flow Statement: Comparative Analysis of Financing, Operating and Investing Activities.

Cash Flow Statement: Comparative Analysis of Financing, Operating and Investing Activities. Cash Flow Statement: Comparative Analysis of Financing, Operating and Investing Activities. Ajay G. Paliwal 1 Mukesh B. Ahirrao 2,Dr. V.S.Rana 3 1 Management Student, M.B.A Dept, S.S.B.T s College of Engineering

More information

6 Index insurance in agriculture The (re)insurer s perspective

6 Index insurance in agriculture The (re)insurer s perspective 47 6 Index insurance in agriculture The (re)insurer s perspective Joachim Herbold Munich Reinsurance Company jherbold@munichre.com KEYWORDS: agricultural insurance, index-based agricultural insurance,

More information

Risk and Risk Management

Risk and Risk Management AGRICULTURAL RISK MANAGEMENT THROUGH WEATHER BASED INSURANCE V.U.M.Rao Principal Scientist Central Research Institute for Dryland Agriculture, Hyderabad-500059 Introduction Agriculture production and farm

More information

Development of agricultural insurance in Russia

Development of agricultural insurance in Russia Development of agricultural insurance in Russia International Conference Managing risks and crises in agricultural insurance 15th, 16th and 17th of March 2010 Liudmila Kosholkina Director of the Department

More information

Flexible Repayment at One Acre Fund

Flexible Repayment at One Acre Fund Executive Summary To meet client needs cost- effectively, on a large scale, and in difficult operating environments, microfinance institutions (MFIs) have relied on simple and standardized loan products.

More information

Insurance and agricultural development: new dynamics in Algeria, Morocco and Tunisia

Insurance and agricultural development: new dynamics in Algeria, Morocco and Tunisia Insurance and agricultural development: new dynamics in Algeria, Morocco and Tunisia Summary Author: Billy Troy (FARM) Farmers, whether in the northern or southern hemispheres, are constantly faced with

More information

INDEX INSURANCE FOR WEATHER RISK IN LOWER- INCOME COUNTRIES

INDEX INSURANCE FOR WEATHER RISK IN LOWER- INCOME COUNTRIES INDEX INSURANCE FOR WEATHER RISK IN LOWER- INCOME COUNTRIES NOVEMBER 2006 This publication was produced for review by the United States Agency for International Development. It was prepared by GlobalAgRisk,

More information

Guidelines for Minimum Standards Property Management Planning. Financial Management Module

Guidelines for Minimum Standards Property Management Planning. Financial Management Module Guidelines for Minimum Standards Property Management Planning Financial Management Module June 2011 June 2011 Acknowledgements All stakeholders who contributed to the development of the Financial Management

More information

Federal Crop Insurance: Background and Issues

Federal Crop Insurance: Background and Issues Federal Crop Insurance: Background and Issues Dennis A. Shields Specialist in Agricultural Policy December 13, 2010 Congressional Research Service CRS Report for Congress Prepared for Members and Committees

More information