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Improving farmers'access to agricultural insurance in India

Author

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  • Clarke,Daniel Jonathan
  • Mahul,Olivier
  • Verma,Niraj

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.

Suggested Citation

  • Clarke,Daniel Jonathan & Mahul,Olivier & Verma,Niraj, 2012. "Improving farmers'access to agricultural insurance in India," Policy Research Working Paper Series 5987, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5987
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    References listed on IDEAS

    as
    1. Daniel J. Clarke, 2016. "A Theory of Rational Demand for Index Insurance," American Economic Journal: Microeconomics, American Economic Association, vol. 8(1), pages 283-306, February.
    2. Shawn Cole & Xavier Gine & Jeremy Tobacman & Petia Topalova & Robert Townsend & James Vickery, 2013. "Barriers to Household Risk Management: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 104-135, January.
    3. World Bank, 2011. "Enhancing Crop Insurance in India," World Bank Other Operational Studies 2748, The World Bank.
    4. Clarke,Daniel Jonathan & Mahul,Olivier & Verma,Niraj, 2012. "Index based crop insurance product design and ratemaking : the case of modified NAIS in India," Policy Research Working Paper Series 5986, The World Bank.
    5. Carter, Michael R. & Galarza, Francisco & Boucher, Stephen, 2007. "Underwriting area-based yield insurance to crowd-in credit supply and demand," MPRA Paper 24326, University Library of Munich, Germany.
    6. Clarke,Daniel Jonathan & Mahul,Olivier & Rao,Kolli Nageswara & Verma,Niraj, 2012. "Weather based crop insurance in India," Policy Research Working Paper Series 5985, The World Bank.
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    Cited by:

    1. Clarke,Daniel Jonathan & Mahul,Olivier & Verma,Niraj, 2012. "Index based crop insurance product design and ratemaking : the case of modified NAIS in India," Policy Research Working Paper Series 5986, The World Bank.
    2. Clarke,Daniel Jonathan & Mahul,Olivier & Rao,Kolli Nageswara & Verma,Niraj, 2012. "Weather based crop insurance in India," Policy Research Working Paper Series 5985, The World Bank.
    3. Clarke, Danielle & Das, Narayan C. & de Nicola, Francesca & Hill, Ruth Vargas & Kumar, Neha & Mehta, Parendi, 2012. "The value of customized insurance for farmers in rural Bangladesh:," IFPRI discussion papers 1202, International Food Policy Research Institute (IFPRI).
    4. Clarke, Daniel J. & Hill, Ruth Vargas, 2013. "Cost-benefit analysis of the african risk capacity facility:," IFPRI discussion papers 1292, International Food Policy Research Institute (IFPRI).
    5. Daniel J. Clarke, 2016. "A Theory of Rational Demand for Index Insurance," American Economic Journal: Microeconomics, American Economic Association, vol. 8(1), pages 283-306, February.
    6. World Bank, 2011. "Enhancing Crop Insurance in India," World Bank Other Operational Studies 2748, The World Bank.

    More about this item

    Keywords

    Hazard Risk Management; Insurance&Risk Mitigation; Climate Change Economics; Debt Markets; Emerging Markets;

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