Your search found 5 records
1 Amarnath, Giriraj; Malik, Ravinder Paul Singh; Taron, Avinandan. 2021. Scaling up Index-based Flood Insurance (IBFI) for agricultural resilience and flood-proofing livelihoods in developing countries. Colombo, Sri Lanka: International Water Management Institute (IWMI). 68p. (IWMI Research Report 180) [doi: https://doi.org/10.5337/2021.213]
Flooding ; Resilience ; Agricultural insurance ; Crop insurance ; Livelihoods ; Developing countries ; Scaling ; Disaster risk management ; Risk transfer ; Business models ; Product development ; Marketing ; Public-private partnerships ; Stakeholders ; State intervention ; Financial institutions ; Microfinance ; Smallholders ; Farmers ; Awareness raising ; Climate change ; Satellite observation ; Rivers ; Rain ; Flood damage ; Crop losses ; Compensation ; Subsidies ; Legal aspects ; Economic aspects ; Social aspects ; Drought ; Case studies / India / Kenya / Rwanda / United Republic of Tanzania / Malawi / Ethiopia / Senegal / Zambia / Thailand / Brazil / Mexico / Mongolia
(Location: IWMI HQ Call no: IWMI Record No: H050608)
(3.14 MB)
This research report presents the first comprehensive framework of business models in terms of developing, marketing and scaling Index-based flood insurance (IBFI). The report evaluated ten case studies on agricultural insurance schemes (macro, meso and micro levels), globally, to develop public-private partnership business models for creating value (product development) and capturing value (product marketing). This report highlights four broad groups of interrelated factors that influence the uptake and scaling of agricultural insurance: (i) behavioral factors that influence farmers’ enthusiasm to invest in insurance; (ii) financial factors that stipulate governments’ willingness to provide financial support; (iii) legal and regulatory factors, which set ground rules for fair business and govern their adherence by stakeholders; and (iv) facilitating factors, including product design and development, business models, research and development, data availability, and awareness creation, which help ensure an efficient supply of insurance services. In summary, the report highlights the need for designing innovative IBFI and its potential benefits for uptake, and efforts for implementing IBFI as a potential risk transfer tool for comprehensive climate risk management among small-scale and marginal farmers.
2 Aheeyar, Mohamed; Samarakoon, Kalani; de Silva, Sanjiv. 2021. Bundled weather index insurance pilot for drought-affected areas in Sri Lanka: reaching marginal farmers. Colombo, Sri Lanka: International Water Management Institute (IWMI). 35p. (IWMI Working Paper 201) [doi: https://doi.org/10.5337/2021.233]
Weather index insurance ; Crop insurance ; Drought ; Pilot projects ; Farmers organizations ; Advisory services ; Awareness-raising ; Arid zones ; Climate change ; Crop losses ; Compensation ; Risk transfer ; Disaster risk reduction ; Resilience ; Decision making ; Insurance premiums ; Cost benefit analysis ; Equity ; Stakeholders ; Partnerships ; Gender ; Women ; Smallholders ; Landlessness ; Communities ; Households ; Socioeconomic environment ; Mobile phones ; Models / Sri Lanka / North Central Province / Galenbindunuwewa / Dunumadalawa
(Location: IWMI HQ Call no: IWMI Record No: H050840)
(3.07 MB)
Drought is an almost annual phenomenon in Sri Lanka, occurring at varying degrees of severity and affecting many parts of the country. These droughts cause significant damage to agriculture and other economic and social activities. This paper assesses the effectiveness of satellite-based weather Index insurance (WII) bundled with real-time climate and agronomic advisory services provided to farmers’ mobile phones. The aim is to enhance the drought resilience of diverse groups of farmers by providing solutions and strategies to extend bundled insurance products to more people and address equity issues.
In this pilot, an insurance product was introduced to farmers in a village in the North Central Dry Zone of Sri Lanka. WII products are seen as a part of the solution to reducing farmers’ risk to climate change. However, in many places, the structure of insurance schemes in the agriculture sector has failed to reach small-scale and marginal farmers who are most in need of risk transfer mechanisms. Based on a farmer survey, we extracted lessons from implementing a bundled insurance scheme as a pilot project to explore the utility of farmer organizations as an entry point for engaging different farmer groups and ensuring they can understand the WII insurance products and can make informed choices.
The survey results show that efforts made at the outset to understand contextual issues and challenges contributed to an effective product design and rollout approach. The rollout was more effective due in part to a partnership with an established local organization while adopting an aggregator model. Covid-19 mobility restrictions prevented full implementation of the rollout.
Index insurance bundled with mobile weather and agronomic advisories increased farmer resilience and reached diverse groups. Farmers emphasized that being able to assess the costs and benefits based on understanding how key elements of the product work is key to their future engagement with such products, which highlights the importance of investing in awareness raising through a blend of print, verbal and visual tools that make complex products understandable to stakeholders with low levels of literacy.
In this pilot, an insurance product was introduced to farmers in a village in the North Central Dry Zone of Sri Lanka. WII products are seen as a part of the solution to reducing farmers’ risk to climate change. However, in many places, the structure of insurance schemes in the agriculture sector has failed to reach small-scale and marginal farmers who are most in need of risk transfer mechanisms. Based on a farmer survey, we extracted lessons from implementing a bundled insurance scheme as a pilot project to explore the utility of farmer organizations as an entry point for engaging different farmer groups and ensuring they can understand the WII insurance products and can make informed choices.
The survey results show that efforts made at the outset to understand contextual issues and challenges contributed to an effective product design and rollout approach. The rollout was more effective due in part to a partnership with an established local organization while adopting an aggregator model. Covid-19 mobility restrictions prevented full implementation of the rollout.
Index insurance bundled with mobile weather and agronomic advisories increased farmer resilience and reached diverse groups. Farmers emphasized that being able to assess the costs and benefits based on understanding how key elements of the product work is key to their future engagement with such products, which highlights the importance of investing in awareness raising through a blend of print, verbal and visual tools that make complex products understandable to stakeholders with low levels of literacy.
3 Belhaj Fraj, Makram; Al-Dabbas, L.; Al-Zyoud, O.; Abu Keshek, A.; Fragaszy, Stephen; Ruckstuhl, Sandra; McDonnell, Rachael. 2022. Initial drought risk finance market assessment for Jordan. Project report prepared by the International Water Management Institute (IWMI) for the Bureau for the Middle East of the United States Agency for International Development (USAID). Washington, DC, USA: USAID; Colombo, Sri Lanka: International Water Management Institute (IWMI). 51p. [doi: https://doi.org/10.5337/2023.214]
Drought ; Risk management ; Finance ; Assessment ; Risk transfer ; Agricultural sector ; Livestock ; Agricultural insurance ; Microfinance ; Investment ; Smallholders ; Farmer participation ; Risk reduction ; Community organizations ; Women ; Youth / Middle East / North Africa / Jordan
(Location: IWMI HQ Call no: e-copy only Record No: H052342)
(1.51 MB)
4 Aheeyar, Mohamed; Amarasinghe, Upali; Amarnath, Giriraj; Alahacoon, Niranga. 2023. Factors affecting willingness to adopt climate insurance among smallholder farmers in Sri Lanka. Climate Risk Management, 42:100575. [doi: https://doi.org/10.1016/j.crm.2023.100575]
Weather index insurance ; Willingness to pay ; Smallholders ; Farmers ; Crop insurance ; Agricultural insurance ; Climate change ; Drought ; Natural disasters ; Vulnerability ; Resilience ; Risk transfer ; Risk management ; Irrigated farming ; Rainfed farming ; Households ; Socioeconomic aspects / Sri Lanka / North Central Province / Anuradhapura / Galenbindunuwewa
(Location: IWMI HQ Call no: e-copy only Record No: H052411)
https://www.sciencedirect.com/science/article/pii/S2212096323001018/pdfft?md5=93cee7b9bb8baaad811ae19ab6f2e4b7&pid=1-s2.0-S2212096323001018-main.pdf
https://vlibrary.iwmi.org/pdf/H052411.pdf
https://vlibrary.iwmi.org/pdf/H052411.pdf
(1.14 MB) (1.14 MB)
Drought is an almost annual phenomenon affecting many parts of Sri Lanka, causing huge damage to agriculture and losses to the broader economy in general and farmers in particular. Climate change threatens to exacerbate these risks. Risk transfer mechanisms, such as crop insurance schemes, may help buffer farmers against these hazards and has gained attention as an adaptation response to become an important element in agricultural risk management. Despite the numerous efforts over several decades to popularize crop insurance as a risk transfer tool in the country under heavy subsidies, farmers’ voluntary enrollment in crop insurance has been very low. Therefore, understanding the farmers’ behaviors and attitudes towards crop insurance and the potential of such programs in emerging climate-induced vulnerabilities is critical to enhancing the welfare of the farming community. This paper assesses the factors that influence willingness to enroll for crop insurance among farmers in irrigated and rainfed farming system in the drought-prone North Central Province of Sri Lanka using a logistic regression model. The study sample consisted of 149 irrigated farmers and 51 rainfed farmers selected randomly. Regression results show that farmer’s age, agriculture as the primary source of income, irrigation as the source of water, and availability of supplementary water source are significantly related to willingness to pay (WTP) for insurance. The overall results indicate the role of household socioeconomic factors and their contextualized risk perceptions shape the adoption decision of crop insurance. The findings of the paper contribute to that end through primary data from a rainfed and irrigated areas in the province. Although the present research was carried out in a limited area, the study area is dominated by the traditional nature of agricultural practices by smallholder farmers in a drought exposed environment, the findings of the study should apply to the rest of the dry zone areas in the country. The results on factors affecting farmers’ willingness to purchase crop insurance assist the practitioners and policymakers to draft the guidelines and strategies for more inclusive interventions for agriculture risk management and building farmer resilience.
5 Aheeyar, Mohamed; Amarasinghe, Upali A.; Amarnath, Giriraj; Alahacoon, Niranga; Prasad, S.; Dissanayake, A. 2023. Assessment of farmers’ willingness to pay for bundled climate insurance solutions in Sri Lanka. Colombo, Sri Lanka: International Water Management Institute (IWMI). 37p. (IWMI Research Report 187) [doi: https://doi.org/10.5337/2023.222]
Weather index insurance ; Farmers' attitudes ; Willingness to pay ; Assessment ; Climate resilience ; Crop insurance ; Risk transfer ; Climate services ; Seed systems ; Agricultural risks ; Disaster risk management ; Strategies ; Intervention ; Climate change impacts ; Drought ; Flooding ; Crop damage ; Smallholders ; Socioeconomic aspects ; Land ownership ; Household income ; Insurance premiums ; Gender equality ; Social inclusion ; Awareness-raising ; Institutions ; Surveys / Sri Lanka / Anuradhapura / Gampaha / Hambantota / Kurunegala / Monaragala
(Location: IWMI HQ Call no: IWMI Record No: H052415)
(1.68 MB)
With the increasing frequency and intensity of climate-related disasters, several social protection and livelihood resilience tools have been tested to reduce agricultural risks. The findings of this study are based on the initial bundled climate insurance solutions pilot conducted in five districts in Sri Lanka (Anuradhapura, Vavuniya, Monaragala, Kurunegala and Ampara) in 2021 with the support of Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). The project intervention was designed to reduce production risks and enhance agricultural resilience through the roll-out of an index insurance product bundled with hybrid seeds and mobile-based weather and agronomic advisories. The research assessed farmers' willingness to pay (WTP) for weather index insurance (WII) solutions with bundled choices as a risk transfer tool with due consideration to the diversity and heterogeneity of the farming population. The report informs the scaling opportunities of bundled climate insurance choices, including product design and implementation among smallholder farmers and reduction of production risks in designing and implementing WII products. The study findings confirm the majority of farmers' perceptions of high climate risk, but the degree of risk is variable between areas and different segments of people. Farmers’ age, gender, farming experience, levels of education, land size operated, and household income form the major factors characterizing the diversity and risk exposures. Attention to gender and social equity issues is important in the design and delivery of insurance products so that the benefits of the interventions reach most of the farming population; this can ensure achievement of the larger development objectives of equity and fairness to disadvantaged people including women. Farmers are experiencing high or very high levels of variability in crop yield, input prices and output prices. However, the differences in willingness to experiment with innovations to minimize the risks and adopt risk-taking approaches to minimize production risks and strengthen livelihood resilience indicate the requirement for carefully designed insurance products. Awareness creation is a prerequisite for this intervention to be a sustainable one. About 80% of farmers are willing to enroll in crop insurance programs, but a major inhibiting factor is the lack of trust in insurers. The amount that farmers are willing to pay as an insurance premium is in the range of 1-2% of the sum insured for the majority of farmers. Bundling insurance with farm support services could be the primary strategy for transitioning insurance programs to be a financially viable and sustainable adaptation strategy, and for upscaling these programs.
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