Scoping Meso-Level Insurance in Agriculture in India
The farmers with low and average incomes have very little room for investment in formal risk-mitigating technologies or mechanisms.
Farmers in India suffer high variability in yields, as a result of uncertainty due to numerous natural and manmade factors such as rainfall (drought or excess), temperature, hail, pest infestation, livestock diseases, spurious seeds, price risk etc. The farmers with low average incomes, especially marginal and small, are left with very little room for investment in formal risk-mitigating technologies or mechanisms. They have to often resort to informal risk mitigation mechanisms though they fail to help them tide over the losses. In this context, insurance appears to be a particularly effective means to reduce the losses to individuals and communities. It also enables farmers to obtain credit and financing for investment in new technologies and better inputs to enhance/sustain their productive capacity.This study seeks to explore the potential of agricultural insurance at the meso-level, which covers “risk-aggregators” such as banks, microfinance institutions, or agribusinesses.The report provides two use cases on setting-up the meso-level insurance model in India.