Crop Insurance for Adaptation to Climate Change in India

In India, agriculture is inherently a risky venture due to uncertainty in production and volatility in price, and more so in the context of increased climatic aberrations and globalisation. Therefore, there is a great need for crop insurance to provide economic support to farmers, stabilise farm income, induce farmers to invest in agriculture, reduce indebtedness and decrease the need for relief measures in the event of crop failure. This paper assesses the performance of the National Agricultural Insurance Scheme, NAIS (area based crop yield insurance) and the pilot Weather Based Crop Insurance Scheme, WBCIS (area based rainfall insurance) under implementation in the state of Odisha, the climate change hot spot of India. Analysing secondary time series data on performance of these two schemes and information gathered through focussed group discussion with insurance users, the paper concludes that WBCIS seems to perform better than NAIS because of higher coverage, larger percentage of farmers benefited, lower premium, faster and more frequent compensation payment and more transparency.