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Micro Crop Insurance for Enhancing the Livelihoods of Small Farmers- Pilots by DHAN Foundation. M.Karthikeyan , Program Leader 11-13th April 2012 University of Twente. Content of my presentation. About DHAN Foundation Context of DHAN’s action research on micro crop insurance

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M.Karthikeyan , Program Leader 11-13th April 2012 University of Twente

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M karthikeyan program leader 11 13th april 2012 university of twente

MicroCrop Insurance for Enhancing the Livelihoods of Small Farmers- Pilots by DHAN Foundation

M.Karthikeyan, Program Leader

11-13th April 2012

University of Twente


Content of my presentation

Content of my presentation

About DHAN Foundation

Context of DHAN’s action research on micro crop insurance

Crop insurance initiatives

Action research on product design and delivery

Challenges in need of further

research


About dhan foundation

About DHAN Foundation

  • DHAN is a grassroots development organisation working with 0.9 million poor families across 12 states in India

  • Currently working with around 287000 farming families as part of Tank-fed Agriculture and Rainfed Farming programs

  • Has been taking up insurance related interventions since 1997


Risk context of tank fed and rainfed farming families

Risk context of tank-fed and rainfed farming families

Controllable risks ?!!!

  • Pests

  • Diseases

  • Weeds

Uncontrollable risks

  • Rainfall – Deficit (major), Excess, Mismatch in distribution

Climate change


Risk context of tank fed and rainfed farming families1

Risk context of tank-fed and rainfed farming families…

  • Deficit rainfall, a production risk, is a major risk affecting more than 60 to 80 % of the yield

    • 25% of annual income drop is noticed

    • Directly affect in rainfed agriculture

    • Indirectly affect by inadequate filling of rainfed tanks in tank-fed agriculture

  • It is recurrent


Market context

Market context

  • Insurance companies were not able to meet the location specific needs through customized policies on a micro scale

    • An exclusive issue like un-controllable pest problem

    • Difference in crop practices across the locations and so the risk

    • Affordable and functional farm unit

      size


Agriculture insurance demand context

Agriculture insurance demand context

  • Lack of knowledge on insurance

  • Farmers not ready to pay actuarial based premiums- Classic problem in pricing risk: People forget bad events

  • Lack of customised products

  • Lack of free access to institutions offering insurance

  • Lack of effective insurance delivery

    mechanism


Dhan intervention context

DHAN intervention context

  • As part of a comprehensive intervention program involving natural resource management (land development, tank rehabilitation), crop production support like supply of quality seeds, microfinance for agriculture & livestock development

  • With farmers’ organisations as platform


Organisational context

Organisational context

Uzhavar groups (UK)

Instit utions 15-20 members

Men/women farmers

Adjacent land holders

Microfinance as supporting

tool

10 – 20 UK in 2 – 3 villages

Institutions150 to 200 UK in 10 to 15 villages

Rainfed Farmers Association

Research Institutions, Banks, Agriculture department

Rainfed Farmers Federation


Crop insurance initiatives

Crop insurance initiatives

Products piloted

  • Deficit Rainfall Insurance

  • Dryspell insurance

  • Mutual Deficit Rainfall Insurance

  • Mutual Pest Insurance

  • Mutual Crop Income Insurance


Enrollment so far

Enrollment so far


Action research on product design

Action research on product design


Action research on product design1

Action research on product design…


Action research on product design2

Action research on product design…


Action research on product design3

Action research on product design…


Action research on product design4

Action research on product design…


Action research on product delivery mechanism

Action research on product delivery mechanism


Mutual crop insurance

Mutual crop insurance

  • Mutual crop insurance is a ‘process based’ insurance mechanism, built on time tested mutuality practice in the farming community

  • It is owned by the insured farming community, and designed and managed by the wiser farmers from the insured farming community


Why dhan went for mutual crop insurance

Why DHAN went for Mutual Crop Insurance?...

  • To meet the location specific needs

  • Housing design, implementation and decision making with the local community

    • There by increasing their ownership and awareness

    • Thereby attempting to link risk transfer and risk education and prevention


Inspiration and support for this initiative

Inspiration and Support for this initiative

  • Experience of mutual crop insurance in Netherlands

  • The training and technical support given by Mutual Insurance Association of Netherlands (MIAN) and financial support and back up guarantee support given by Achmea Re


Community organisation co for livelihood enhancement and risk management rfdp

Community organisation (CO) for livelihood enhancement and risk management- RFDP

Uzhavar groups (UK)

Banks

Instit utions 15-20 members

Men/women farmers

Adjacent land holders

Microfinance as supporting

tool

10 – 20 UK in 2 – 3 villages

Institutions150 to 200 UK in 10 to 15 villages

Rainfed Farmers Association

Research Institutions, Banks, Agriculture department

Rainfed Farmers Federation

MutualInsurance Committee


Modalities of mutual crop insurance

Modalities of mutual crop insurance

  • A Mutual insurance committee (MIC) has 15 to 30 members

  • The generic roles of this committee is

    • Policy making and reviewing the policy

    • Implementation of the insurance product along with staff

  • The specific roles will vary depending on the product


Challenges in need of further research

Challenges in need of further research

  • Insurance education – what works and what does not

    • How crop insurance can become demand driven?

  • Combining risk transfer with risk education and reduction practices in agriculture


Challenges in need of further research1

Challenges in need of further research…

  • Conducive policy for crop insurance product development and delivery

    • Modalities of investing on

      • Customised product development for an area/crop

      • Infrastructure and data (raingauges)

    • Modalities for reinsurance

    • Addressing affordability issue


M karthikeyan program leader 11 13th april 2012 university of twente

THANK YOU!


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