Climate Change and Uncertainty
in Agriculture: Does Crop Insurance
Help in India?
Meenakshi Rajeev, Manojit Bhattacharjee and B.P. Vani
Abstract Climate change has impacted production risk in agriculture in many
ways especially by increasing the volatility in production. Agriculture, which still in
India is weather dependent, faces more frequent losses than before and variability in
losses is also rising. As about 80 % of the farmers are small and marginal in India,
they need certain protection from such uncertainties for their sustenance.
Undoubtedly, crop insurance can provide the required safety net and enable farmers
to take other measures that help to reduce impacts of climate change. In this back
drop, this paper examines the state of crop insurance in India using both secondary
data from National Sample Survey Organisation (NSSO) and conducting a field
survey in the state of Karnataka. The analysis of data shows that only a meager 4 %
of households are covered under crop insurance. While the lack of information is
the major reason of not opting for insurance, another large percentage of the
households are not interested due to the unattractive design of the schemes. Our
regression analysis further highlights that both economically and socially advanced
classes have better adoption record. These findings send strong signals to the policy
makers to re-think about the mitigation strategies planned by them for the poor
farmer households to handle the challenges of uncertainty in the face of climate
change in India.
Keywords Risks Á Uncertainty Á Mitigation strategies Á Crop insurance
JEL Classification G2 Á Q 14 Á 54
M. Rajeev (&) Á B.P. Vani
Centre for Economic Studies and Policy, Institute for Social and Economic Change,
Dr. V.K.R.V. Rao Road, Nagarbhavi, Bangalore 560072, Karnataka, India
e-mail: meenakshi@isec.ac.in
M. Bhattacharjee
St. Joseph’s College, Bangalore, India
© Springer International Publishing Switzerland 2016
S. Nautiyal et al. (eds.), Climate Change Challenge (3C)
and Social-Economic-Ecological Interface-Building, Environmental Science,
DOI 10.1007/978-3-319-31014-5_14
241
in Agriculture: Does Crop Insurance
Help in India?
Meenakshi Rajeev, Manojit Bhattacharjee and B.P. Vani
Abstract Climate change has impacted production risk in agriculture in many
ways especially by increasing the volatility in production. Agriculture, which still in
India is weather dependent, faces more frequent losses than before and variability in
losses is also rising. As about 80 % of the farmers are small and marginal in India,
they need certain protection from such uncertainties for their sustenance.
Undoubtedly, crop insurance can provide the required safety net and enable farmers
to take other measures that help to reduce impacts of climate change. In this back
drop, this paper examines the state of crop insurance in India using both secondary
data from National Sample Survey Organisation (NSSO) and conducting a field
survey in the state of Karnataka. The analysis of data shows that only a meager 4 %
of households are covered under crop insurance. While the lack of information is
the major reason of not opting for insurance, another large percentage of the
households are not interested due to the unattractive design of the schemes. Our
regression analysis further highlights that both economically and socially advanced
classes have better adoption record. These findings send strong signals to the policy
makers to re-think about the mitigation strategies planned by them for the poor
farmer households to handle the challenges of uncertainty in the face of climate
change in India.
Keywords Risks Á Uncertainty Á Mitigation strategies Á Crop insurance
JEL Classification G2 Á Q 14 Á 54
M. Rajeev (&) Á B.P. Vani
Centre for Economic Studies and Policy, Institute for Social and Economic Change,
Dr. V.K.R.V. Rao Road, Nagarbhavi, Bangalore 560072, Karnataka, India
e-mail: meenakshi@isec.ac.in
M. Bhattacharjee
St. Joseph’s College, Bangalore, India
© Springer International Publishing Switzerland 2016
S. Nautiyal et al. (eds.), Climate Change Challenge (3C)
and Social-Economic-Ecological Interface-Building, Environmental Science,
DOI 10.1007/978-3-319-31014-5_14
241