Green insurance

Ranjana Kumar, Chairperson, NABARD, discusses the challenges and opportunities faced by Agriculture Crop Insurance and Rural Markets in developing countries

Agriculture remains a dominant sector in a large number of developing countries and has always been a risky business. Unlike the industrial sector it is subject to the vagaries of nature. Uncertainty of crop yield is thus one of the basic risks every farmer has to face in developing countries. In most of these countries, majority of farmers are poor with extremely limited means and resources and are therefore unable to bear the risks of crop failure. It is true that much of the present uncertainty of crop production in these countries could be removed by adopting technical measures like:

The co-variability of risks however reduces the effectiveness of traditional measures. Which is why, the modern insurance sector can play a major role in considerably strengthening the financial security of farmers.

RURAL MARKETS IN THE INDIAN CONTEXT
India has the second largest population in the world, having already crossed the one billion mark. And nearly 72 per cent of the total population is engaged in agriculture, with the workforce comprising 60 per cent of it. The lifeblood of the Indian economy, agriculture not only provides livelihood but is also co-related to the performance of the overall economy. Though the real issue is affordability by the poor, 65 per cent of the cultivated area falls under dry land farming. Multiple crops and its practices exist due to diversity of land, land holding pattern, regional characteristics, natural surroundings and the pattern of life with only 35 per cent comprising of irrigated land. The irrigation facilities presently available do not have the perennial source of water. With ground water resources getting more and more depleted, 35 per cent of the produce is lost due to post-harvest losses. Many cultivators are an uneducated lot not fully aware of the scientific and technologically advanced farm practices. Since the market prices are not well developed, the farmers do not get their remunerative prices, which is why there are fluctuations in agriculture prices. Rural infrastructure is yet another important area, not adequate enough to take care of the requirements of the rural households. Animal husbandry too is predominantly a secondary occupation in rural areas. Lack of veterinary facilities, inadequate

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