Crop Insurance in Karnataka

Crop Insurance in Karnataka

The authors examine the performance of the crop insurance scheme in Karnataka, a southern state of India and the second driest state in the country. Their analysis highlights weaknesses in product design, implementation challenges, and operational problems. The authors' finding is that the crop insurance scheme in its current form does not achieve its objectives, either explicit (risk management) or implicit (safety net and containment of both the central and state governments' contingent liability). The crop insurance scheme performs poorly both in terms of coverage (number of hectares insured and number of farmers purchasing insurance) and financial performance. The authors provide a framework for designing a crop insurance scheme based on the premise that insurance is a cost effective risk management techniques. They also provide some new ideas and thinking toward both improving the existing crop insurance scheme and exploring alternatives to the current product, based on an area-yield approach.

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Bibliographic Details
Main Authors: Kalavakonda, Vijay, Mahul, Olivier
Language:English
Published: World Bank, Washington, DC 2005-07
Subjects:ADVERSE SELECTION, AGRICULTURAL INSURANCE, AGRICULTURAL LABORERS, AGRICULTURAL PRODUCTION, AGRICULTURAL PRODUCTIVITY, ARABLE LAND, BASIS RISK, CASH CROPS, CATASTROPHIC LOSSES, CEREALS, COFFEE, COMMERCIAL BANKS, COMMERCIAL CROPS, COMMERCIALIZATION, COMMODITY, CONTINGENT LIABILITY, CONTRACTUAL SAVINGS, COTTON, COVERAGE, CROP, CROP DIVERSIFICATION, CROP INSURANCE, CROP INSURANCE SCHEME, CROP LOSSES, CROP PRODUCTION, CROP YIELD, CROP YIELDS, CROPPING, CROPPING PATTERNS, CROPS, CULTIVATION, CYCLONES, DATES, DECLARATIONS, DEFICITS, DISASTER INSURANCE, DISASTER RELIEF, DISASTERS, DIVERSIFIED CROPPING, DROUGHTS, EARTHQUAKES, ECONOMIC CHANGE, EFFECTIVE USE, EFFECTS OF DROUGHT, EMPLOYMENT, EXCHANGE RATE, EXPENDITURES, FARM, FARM ACTIVITIES, FARM HOUSEHOLDS, FARM INCOME, FARM INCOMES, FARM PRODUCE, FARMER, FARMERS, FARMING, FARMS, FINANCIAL INSTITUTIONS, FINANCIAL PERFORMANCE, FLOODS, FOOD CROPS, FOOD GRAINS, FRUITS, GRAIN, GRAIN CROPS, HARVESTING, HORTICULTURAL CROPS, HORTICULTURE, INDEMNITY, INFLATION, INSURANCE, INSURANCE BENEFITS, INSURANCE CONTRACTS, INSURANCE COVERAGE, INSURANCE PREMIUM RATES, INSURANCE SYSTEM, JUTE, LABOR FORCE, LAND DEVELOPMENT, LANDLESS LABORERS, LANDSLIDES, LIBERALIZATION, LOSS RATIO, MARGINAL FARMERS, MIGRATION, MITIGATION, MORAL HAZARD, NATURAL DISASTERS, OILSEEDS, PLANTING, POOR FARMERS, POOR HOUSEHOLDS, POVERTY ALLEVIATION, PRECIPITATION, PREMIUMS, PRODUCE, PROGRAMS, PUBLIC POLICY, PULSES, RAINFED AREAS, RATES, REINSURANCE, REINSURERS, RELIEF, RESERVE BANK OF INDIA, RICE, RISK, RISK EXPOSURE, RISK MANAGEMENT, RISK SHARING, SAFETY, SMALL FARMERS, SOWING, SUGARCANE, TEA, TURF, WAGES, WHEAT,
Online Access:http://documents.worldbank.org/curated/en/2005/07/6043337/crop-insurance-karnataka
https://hdl.handle.net/10986/8216
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Summary:The authors examine the performance of the crop insurance scheme in Karnataka, a southern state of India and the second driest state in the country. Their analysis highlights weaknesses in product design, implementation challenges, and operational problems. The authors' finding is that the crop insurance scheme in its current form does not achieve its objectives, either explicit (risk management) or implicit (safety net and containment of both the central and state governments' contingent liability). The crop insurance scheme performs poorly both in terms of coverage (number of hectares insured and number of farmers purchasing insurance) and financial performance. The authors provide a framework for designing a crop insurance scheme based on the premise that insurance is a cost effective risk management techniques. They also provide some new ideas and thinking toward both improving the existing crop insurance scheme and exploring alternatives to the current product, based on an area-yield approach.

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