Transforming Weather Index-Based Crop Insurance in India: Protecting Small Farmers from Distress. Status and a Way Forward. Research Report IDC-8

Raju, K V and Naik, G and Ramseshan, R and Pandey, T and Joshi, P and Anantha, K H and Rao, A V R K and Moses Shyam, D and Kumara Charyulu, D (2016) Transforming Weather Index-Based Crop Insurance in India: Protecting Small Farmers from Distress. Status and a Way Forward. Research Report IDC-8. Technical Report. ICRISAT, Patancheru.

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Research Program : Asia

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We are extremely thankful to the Prime Minister’s Office for asking us to help prepare the strategy report. This document was prepared by a Task Force set up by ICRISAT for submission to the Prime Minister’s Office, Government of India. Its members are KV Raju (ICRISAT), Ramaseshan (ReMSL), Tushar Pandey and Partha Joshi (Yes Bank), KH Anantha, D Moses Shyam, AVR Kesava Rao and Kumara Charyulu (ICRISAT). We sincerely acknowledge their contributions towards the report. We are extremely thankful to senior officers of the Ministry of Agriculture and Farmers Welfare, Government of India for their very useful suggestions on the earlier version of this paper. This report is part of a series of Strategy Papers drafted on the request of the Prime Minister’s Office, India.


In India, agriculture contributes 14% of the GDP and employs 54% of the workforce (NCAER 2013). It accounts for 8.56% of the country’s exports. Despite agriculture’s steady decline in share in the GDP, it remains the largest economic sector and plays a significant role in the country’s overall socioeconomic development. However, agriculture is fundamentally a risky economic activity, particularly for small and marginal farm households because the climate risks, including aberrant rainfall, and natural calamities and input risks have a significant impact on yields. Low investment potential combined with poor coping ability render farming households vulnerable to debt and poverty traps in the face of adverse weather shocks. It is estimated that about 60% of the variation in yield can be attributed to various weather-related shocks. Since 70% of crop production in India is subject to the vagaries of the monsoon, crop insurance has been in existence through many public sector insurance companies for decades. Different agricultural insurance products have been tried out on a limited, ad-hoc and scattered manner...

Item Type: Monograph (Technical Report)
Divisions: Research Program : Asia
CRP: CGIAR Research Program on Dryland Systems
Series Name: PMO Strategy Document Series
Uncontrolled Keywords: Weather Index, Crop Insurance, Small Farmers, Index-based weather insurance
Subjects: Others > Smallholder Farmers
Others > Agriculture-Farming, Production, Technology, Economics
Others > Agricultural Economics
Depositing User: Mr Ramesh K
Date Deposited: 03 Nov 2016 06:03
Last Modified: 31 Jan 2018 04:33
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