Enhancing knowledge and capacity for improved agriculture insurance.

Agriculture has long been considered the backbone of Indian economy. While contributing around 16 % of India's GDP, it provides employment to over 60% of the population. Thus, the growth of this sector is an essential prerequisite for reduction of poverty in India. However, only 40% of the area under agriculture has access to irrigation facilities, while the rest of 60% are still subject to natural and climate disasters. Recently, two consecutive monsoon failures resulted in wide-scale crop failure and resultant agriculture and rural distress. The government has been experimenting with various insurance schemes to deal with these risks and alleviate the distress caused to the farmers and farm workers, however only 23 % of the cropped area and farmers have an insurance cover – a situation that leaves a vast majority at the mercy of the weather and other related crop risks. Pradhan Mantri Fasal Bima Yojana (PMFBY) is an important scheme of the Government of India that attempts overcome the prevailing shortcomings, and envisages covering 50 % of the area and farmers involved in cultivation. It raises hugely the subsidy amount to be provided by the government and extend the coverage provided to the farmers. Despite the growth in number of farmers enrolled (to about 26.5% in the first season of operation of this scheme), there is substantial distance to be covered to reach the targeted numbers in a meaningful manner. Though this scheme, with its low premium (for the farmer) and covering all crops can be extremely useful, large proportion of small holder farmers remain excluded. This is due to the fact that there is a lack of understanding among the farmers and farm workers of the usefulness of insurance products and how it is vital in protecting them against their risks and opening doors towards investments. There is also an absence of appropriate outreach mechanisms to connect with these small holder farmers. Through this four year collaboration, the ILO’s impact insurance Facility will assist in better understanding and implementation of insurance services and appropriate outreach mechanisms for farmers and farm workers to access government insurance programs. It will do so by undertaking several activities to improve the understanding and implementation of these mechanisms through extraction and dissemination of lessons via knowledge sharing sessions as well as through capacity building for effective claims processes via pilots in technology for crop cutting experiments and claims adjustment /payment. These will help in building demonstration cases lessons which can be utilized for further action.

Project symbol

IND/17/01/FOR

Admin unit

SFU

Start date

01/05/2017

End date

30/11/2021

Total allocation

515000

Total expenditure

Status

Closed

503027

Development Partners

Ford Foundation

Country/Countries

India

Outcomes

Outcome 3: Economic, social and environmental transitions for full, productive and freely chosen employment and decent work for all