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Helping farmers manage risks resulting from climate change

Emerging Insight #:


Date of Release:

  March 8, 2018


  Other channels, Agriculture


  The Facility

Lessons from a project with Ford Foundation in India

As extreme weather events increase in frequency and intensity, they lead to loss of income and productive potential. Those affected are forced to resort to a variety of desperate coping strategies that include reducing food consumption, taking children out of school, borrowing money and selling assets. These strategies diminish people’s ability to cope with the impacts of climate change, both now and in the future. As a result, there is a growing need to explore meaningful options for managing and transferring the risks associated with climate change.

The Government of India is active in promoting insurance to farmers, in particular through its Prime Minister’s Crop Insurance Scheme, but the coverage is largely bundled with loans from rural banks. The ILO’s Impact Insurance Facility is working with the Ford Foundation and its partners in four states of India to test other distribution channels in order to protect farmers who are not taking loans. The project aims to build the capacity of alternative distribution channels, including non-governmental organizations and community groups, to engage with farmers, designated insurers and government institutions, to improve farmers’ understanding of insurance and set up processes that can help them to enrol and receive claims.

The need analysis conducted in the first crop season highlighted several issues that contribute to low uptake of the insurance scheme amongst farmers who do not take a loan. A lack of understanding of agricultural insurance and of the specific scheme is an important constraint. Farmers tend to equate insurance with life insurance and those who do know about the crop insurance scheme do not know whether their crops are eligible for cover. The information provided by the Government needs to be “translated” for farmers by the insurer or distributor.

The Facility and Ford Foundation project is working with non-governmental organisations and farmer-producer associations so that they can deliver information to farmers and serve as access points for farmer enrolments. In Rajasthan, a team of dedicated community-based agents (called krishi sakhis) have been tasked with explaining the insurance solution to farmers. In Madhya Pradesh, Common Service Centres (CSCs), which are government-supported technology-enabled kiosks manned by village-level entrepreneurs, are being used as points-of-sales where farmers can enrol.

The results from these experiments will be evaluated in 2018. To learn more about other projects that the ILO’s Social Finance Programme is supporting, see our 2017 Annual Report.