Agriculture provides jobs to 1.3 billion people, which is close to 40 per cent of global employment, most of them working poor. Agricultural insurance can play an important role in securing farmers’ livelihoods and boosting the efficiency of the agricultural sector, but access to agricultural insurance remains low.
The following are five lessons on how governments can improve implementation of insurance programmes to improve the livelihoods of farmers
1) Insurance as part of agricultural policy
Government should take the strategic lead for financial inclusion and insurance for rural and agricultural communities. They should ensure that insurance is included in the national agricultural policy as a part of a broader strategy that creates capacities and incentives for agricultural risk management.
2) Government as driving force of market development
Governments can drive market development of agricultural insurance by assisting nascent programmes to move from pilots to maturity. Governments acting as independent and credible facilitators can enable market-based solutions.
3) Rural insurance markets incentivized
Public policy and regulation can be used in a way that helps governments facilitate development of rural insurance markets, for example through a facilitative tax and regulatory interventions, and by protecting the interests of the consumers.
4) Different government levels – same goal
As diverse ministries, as well as different levels of government (central, state, district) are involved in the subject, there is a need to improve coordination and better define their roles.
5) Cooperation with private sector
Policymakers need to explore ways to improve the interaction between government programmes and the private sector. The private sector can effectively assist in implementation of government programmes, for which they can leverage the agriculture extension services for education campaigns and redress for consumer grievances.