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Prospects of Weather Index-based Crop Insurance in Bangladesh

Md. Tareq Hasan
Department of Business Administration, Sheikh Fazilatunnesa Mujib University, Jamalpur, Bangladesh

Abstract/ Executive Summary:

The agricultural sectors of Bangladesh are frequently affected by natural disasters such as droughts, excessive rainfall, floods, flashflood, heavy fog, earthquakes, storms, cyclones, salinity and landslides. Agriculture or crop insurance is an important method by which farmers can stabilize their income and investment against the disastrous effect of losses for natural hazards or low market price of the crops. Crop insurance helps the farmers of developing and underdeveloped countries to initiate production activities after a bad agricultural period. At first, Green Delta Insurance Company has started Weather Index Insurance since 2015 by supporting of World Bank group in Bangladesh. Later on, Sadharan Bima Corporation (SBC) also proposed another new project named ‘Weather Index-Based Crop Insurance (WIBCI)’. Agriculture or crop insurance should be based on risk management strategy. The purpose of this study is to implement and further possibility of weather index-based crop insurance in Bangladesh and a descriptive method is used to represent the information. The possible result of this study is continuous crops production activities of the farmers after a natural disaster. Bangladesh should have started an agriculture or crop insurance system earlier for better output from agricultural sectors.

Keywords: Agriculture, Crop, Disaster, Insurance, GDIC, WIBC

Location: In Bangladesh

Start Date:

End Date:

Program Area: Resource Development and Management

Non-commodity: Insurance

Objectives:

1. To study the initiatives taken to implement weather index-based crop insurance in Bangladesh. 2. To find out the possibility of index-based crop insurance in Bangladesh.

Methodology:

A stable agriculture is most vital issue for the food security of a country. Insurance in agriculture is fully new concept here in Bangladesh. As an agriculture-dependent country, Bangladesh has got great significance of crop insurance or weather index-based crop insurance for continuous agri-production after a bad agricultural period. This study is based on secondary data. All the secondary data has been collected from internet, newspapers, articles, books and magazines. In this study data are analyzed in descriptive method.

Source of Information: International Journal of Agricultural Economics, 2019; 4(1): 32-40; ISSN: 2575-3851 (Print); ISSN: 2575-3843 (Online)

Article Link (Online Journal): doi: 10.11648/j.ijae.20190401.15

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The success rate of index-based insurance is not that much remarkable without India. Nevertheless, several international initiatives have been launched to promote and developed WIBCI to achieve greater scale. If these efforts are to succeed, there needs to be a better understanding of the constraints on WIBCI, how these might be overcome and at what cost relative to the potential benefits of WIBCI. Since Bangladesh is an agricultural country within the South Asia zone and a significant percentage of GDP is depend on these sectors. So, agricultural sectors should be considered under best policies of insurance where most of all farmers will be felt secure to produce and production process will be continued after any kinds of natural disaster. Bangladesh should study or analyze more and more regarding the crop insurance and index-based insurance policies before implementing over the country and should launch the policies immediately by both government and private sectors for better outputs of agricultural sectors.

Knowledge Management: Journal