It was eight o’clock on a bright summer morning, the scheduled time for start of the insurance literacy training in Jalodia village of Dewas district in Madhya Pradesh (India). The venue for the training (Panchayat office premises) was buzzing with low-tone conversations among some of the farmers who had gathered at the venue before the given time. The training session happened under a tree, thus helping us survive the summer heat.
We (training team from CIRM and BASIX) reached the venue almost half an hour before the scheduled time to make proper arrangements for the training. But, to our surprise the venue has already been set up. The support of the Sarpanch (village head) and the Chowkidar (Panchayat watchman) was immense. They had spread the information about the session to all the targeted households and made necessary arrangements.
The training session lasted for over two hours, surpassing the allotted time slot by a margin of 15 to 20 minutes. The major thrust area of the training was to explain the concepts of insurance and risk pooling, and to introduce the concept of weather index based insurance to farmers.
The training started with discussions on the challenges which the farmers are facing in crop cultivation. Farmers shared their experiences on crop cultivation, the risks they face in obtaining a good crop due to various weather related risks and the challenges such events pose on their economic well being. They also highlighted the changing pattern in rainfall in the recent past which has resulted in scattered rains even across the same village, not to mention the difference in rain obtained across larger geographies such as the administrative block or tehsil or district.
After discussions, the idea of insurance was introduced to them as a risk mitigation tool. Farmers were very critical about the conventional agricultural insurance. One of the farmers also shared a story about partiality in the process of loss reporting and thus claim settlement in conventional crop insurance by the local Patwari (village land record keeper) as for some reason the Patwari happens to favour one group/community/individual over others. They were of the opinion that like other insurance products such as Motor Insurance or Property Insurance, crop loss assessment should also be done at an individual farm level. They also expected payouts to happen in case of losses in crop yield on account of various other factors such as pest attack, etc.
Then we introduced few games to lighten the mood after some serious discussions. These games were actually practical examples where the farmers themselves realized the importance of insurance as a risk mitigating tool. Much to our delight, they participated in the games enthusiastically and also embraced the concepts of risk pooling and how insurance works to mitigate the losses.
Following the games, there were discussions on the concept of weather index insurance and how it works as a tool to mitigate losses. Farmers appreciated the concept of weather index insurance and welcomed it as tool for risk mitigation to crop production. But, at the same time they raised concerns about the difference in actual rainfall at the farms and the rain that would be recorded at the weather station (BASIS RISK).
Some of the educated farmers appreciated the claim settlement process in the weather index insurance and agreed that this could be a good tool to manage weather risk. They also enquired about the risk coverage that would be available to them and the premiums of such an insurance product. They were quite eager about the product and enquired extensively about the procedure to avail such an insurance product.
Finally the session concluded on a positive note with feedback from farmers and also questions on various aspects of crop insurance and index insurance to which responses were given. With completion of the first session, the trainers (from BASIX) gained confidence to deliver the training’s in other villages as well.
A total of eight team of trainers, comprising of two trainers each, is presently delivering the training to the targeted farmers in 60 villages of Dewas and Bhopal districts. The insurance literacy training is expected to inform and educate a minimum of 1800 targeted households about the concepts of weather index insurance. The objective of conducting the insurance literacy training is to study the impact of these trainings on the take-up of index insurance products.
In 30 out of the 60 villages, second round of insurance literacy training was conducted around the middle of May. The objective of conducting the second round of trainings is to study the impact of the amount of training on take-up decisions for weather index insurance products by the farmers.
For conducting the insurance literacy trainings in the villages CIRM collaborated with BASIX (Bhartiya Samruddhi Investments and Consulting Services Ltd., Bangalore). Field trainers from BASIX were trained by master trainers from BASIX and researchers from CIRM in order to prepare them for delivering the trainings in villages. This project on provision of simplified weather index insurance products to the farmers is being implemented by CIRM in collaboration with IFPRI (International Food Policy Research Institute, Washington) in 90 villages of Dewas and Bhopal districts of Madhya Pradesh.
It would be of paramount importance to note that farmers embraced the concept of weather index insurance very enthusiastically and chances of good take-up of the weather index insurance in the project villages looks very promising. Now, we need to prepare ourselves for the next step in the project i.e. delivery of the actual products to the farmers on the field and wait for their reactions to the same. The results of the trainings would show only when the actual crop period starts and the take-up details are out.
Contributed by Ashutosh Shekhar, Agricultural Analyst and Tirtha Chatterjee, Researcher.
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