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Institute for Financial Management and Research
Centre for Insurance and Risk Management
Summer Internship Report
On
Acceptability of weather insurance products in Dungarpur district of
Rajasthan
Submitted
By
Mayank Midha
PGDRM, Institute of Rural Management Anand (IRMA)
PRM-28
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ACKNOWLEDGEMENT
The summer internship at CIRM was a great learning experience for me and I take this
opportunity to thank individuals without whose help and support this study would not have
been possible.
First of all, I would like to thank Prof. Nivedita Kothiyal, and Mr. Alpesh Macwan at IRMA
for coordinating and organizing the traineeship segment.
I would like to acknowledge the support provided by Ms.Rupalee Ruchismita, Executive
Director, CIRM and Prof. C.Vijaylakshmi, at IFMR Trust in instituting this project. I
acknowledge my discussions with Mr. Chetan Bhatia and Mr. Mangesh Patankar, Consultants
at CIRM, and the kind of support extended by them during the study is really commendable.
The study at Dungarpur, Rajasthan could not have been a reality but for the diligent,
reciprocative support of Mr. Vishnu Khedkar at the Confederation of Indian Industries (CII),
Mr.Tarachand Varma at PI industries and the villagers in village Bodigama Bada, Oda,
Pachlasa Bada and Punjpur.
Special thanks are due to my faculty guide, Prof. Preeti Priya who right from the onset of my
working on this project provided me with her guidance and moral support.
Mr. Sarthak Gaurav at IGIDR, Mumbai deserves a special mention for letting me explore and
helping me with all the doubts regarding various aspects related to micro insurance.
Mayank Midha
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Table of Contents
LIST OF ABBREVIATIONS
LIST OF TABLES
LIST OF FIGURES
LIST OF CHARTS
LIST OF BOXES
LIST OF ANNEXURES
EXECUTIVE SUMMARY
1. INTRODUCTION ................................................................................................... 10
1.1 THE MICRO INSURANCE MARKET ............................................................................. 11
1.2 TYPES OF WEATHER RISK MANAGEMENT INSTRUMENTS: .......................................... 12
2. STUDY AREA ........................................................................................................ 17
2.1 DUNGARPUR DISTRICT: ............................................................................................ 17
3. OBJECTIVES ......................................................................................................... 24
4. METHODOLOGY .................................................................................................. 24
4.1 QUALITATIVE PHASE: ............................................................................................... 24
4.2 QUANTITATIVE PHASE: ............................................................................................. 26
5. ANALYSIS & RESULTS: ....................................................................................... 27
5.1 QUALITATIVE PHASE - FINDINGS ............................................................................... 28
5.2 QUANTITATIVE PHASE - FINDINGS ............................................................................ 31
5.3 SELECTION OF POTENTIAL PARTNERS........................................................................ 36
5.4 SUMMARISING ANALYSIS AND RESULTS .................................................................... 40
6. CONCLUSION ....................................................................................................... 41
7. LIMITATIONS ....................................................................................................... 42
8. REFERENCES ........................................................................................................ 44
Annexures.............................................................................................................................44
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Abbreviations Used:
AICL: Agriculture Insurance Company of India Ltd.
APL: Above Poverty Line
BDI: Backward Districts Initiative
BoP: Bottom of Pyramid
BPL: Below Poverty Line
CCEs: Crop Cutting Experiments
CCIS: Comprehensive Crop Insurance Scheme
CII: Confederation of Indian Industries
CIRM: Centre for insurance and Risk Management
FGDs: Focussed Group Discussions
GOs: Government Organisations
GVT: Gramin Vikas Trust
Ha: Hectare
IFMR: Institute for Financial Management and Research
INR/Rs.: Indian Rupee
ITC: Indian Tobacco Company Ltd.
NAIS: National Agriculture Insurance Scheme
NGOs: Non-government Organisations
NREGS: National Rural Employment Guarantee Scheme
PEDO: People’s Education and Development Organisation
PI Industries: Pesticides India Industries
PRAs: Participatory Rural Appraisal
PRIs: Panchayati Raj Institutions
RSVY: Rashtriya Sam Vikas Yojana
SCs: Scheduled Castes
SHGs: Self Help Groups
STs: Scheduled Tribes
UNDP: United Nations Development Program
WRMS: Weather Risk Management Services Pvt. Ltd.
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List of Tables:
Table No. Table name
1 Performance of the area yield based crop insurance in India
2 Advantages and challenges of index-based insurance
3 Dungarpur district at a glance
4 Major Differences between the blocks of Dungarpur district
5 Sampling plan and size of household survey
6 Categories of the institutions
7 Comparison of prospective partners across key parameters
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List of Figures:
Figure No. Figure name
1 Social factors influencing consumer buying behaviour
2 Psychological factors influencing consumer buying behaviour
List of Charts:
Chart No. Chart name
1 Per capita income
2 Average land holding (hectares)
3 Human development index
4 Information/knowledge about farming techniques
5 Information/knowledge about agri-produce marketing
6 Reasons for not taking insurance products
7 Preference for insurance agent/vendor
8 Preference for information channel
List of Boxes:
Box No. Name
1 Features and drawbacks of the government-sponsored area yield
crop insurance scheme in India
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List of Annexures:
Annex No. Annexure Name
1 District Map of Dungarpur
2 Private-Public-Peoples Partnership Convergence Chart -CII
3 CII Dungarpur Initiative: Programme Impact Chart
4 Social and Resource maps
5 Household Survey Questionnaire
6 Income/Expenditure mapping
7 Details of FGDs
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EXECUTIVE SUMMARY
I. Objective: The objective of the study is to conduct a need analysis for a weather insurance
product in the Dungarpur District of Rajasthan. This includes a Client Profiling Study,
identifying various factors that influence or hinder the adoption of the product and to
recommend a potential partner for distribution of this product.
II. Scope of the Study: The scope of the study is limited to the selected representative villages
in the Aspur Block of the district.
III. Methodology: The methodology used for the study includes both Qualitative and
Quantitative techniques. During the qualitative phase various Participatory Rural Appraisal
(PRA) exercises and Focussed Group Discussions (FGD) with the villagers were conducted
to generate socio-economic, psychographic and demographic primary data. The data
collected through these exercises was validated through In-Depth Unstructured Interviews
with the villagers. Findings of the qualitative phase were substantiated through a structured
quantitative Survey through a Survey questionnaire. Furthermore descriptive analysis of the
quantitative data was undertaken.
IV. Sources of Data: The sources of primary data were different PRA exercises, informal
unstructured interviews, Focussed Group Discussions and a Client Survey through a
Structured Questionnaire. The Secondary Data Sources were Annual Reports of various
insurance organisations, journals and working papers on insurance products.
V. Observations and Conclusions: The range of risks that affect the income of agricultural
producers and agribusinesses is quite broad. The two predominant risks being price risk and
production risk, and weather, in particular, is one of the most persistent production risks
which impact all aspects of the agricultural supply chain, particularly in economies based
on rain-fed agriculture and is mostly responsible for the variations in the income of the
farmers. There are only a few insurance mechanisms which deal efficiently with weather
risk. The traditional Area-Yield Indexed Crop insurance (NAIS) in India, an initiative of the
government has been in existence for the past two decades and has been continuously
criticised on a number of aspects ranging from economic, administrative and financial.
Whereas the relatively new Index based weather insurance products are less susceptible to
some of the problems intrinsic in traditional multi-peril crop insurance and hence have
higher probability of getting accepted by the farmer communities. The demand for these
insurance products by farmers in the context of rain-fed village economy is dependent on a
range of different factors ranging from cultural, social, psychological and personal factors.
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The frequency and the intensity of the shocks faced by the farmers determine the need for
the product. On the other hand affordability, previous experience and the knowledge about
the product also influence demand. Product features like: risk coverage, premium,
distribution of the product and even the choice of the vendor play a considerable role in
affecting the demand for the product. The study also reveals that lack of knowledge about
insurance products is the most common reason for not buying insurance products and
surprisingly the respondents felt that affordability doesn’t act as a major hurdle in buying
the product. As per the study the need for weather insurance is considerably high but this is
subject to certain specific product features offered by the insurer.
VI. Recommendations: The Index based weather insurance could be launched in the Aspur
block for the pilot phase covering both excess as well as deficit rainfall for the Kharif
season. CIRM, in particular, should look at the possibility of having a revenue generating
model by designing the training modules for the villagers through which awareness level
about the insurance products can be increased. People’s Education and developent
Organisation (PEDO) and SPECK systems could be used as potential delivery channels.
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1. INTRODUCTION
There is a range of risks that affect the income of agricultural producers and agribusinesses.
The two predominant risks are: price risk, which is the reflection of variations in market
prices for agricultural commodities and agriculture inputs; and production risk, which
encompasses variations in the volume or quality of the commodity produced. Weather, in
particular, is one of the most persistent production risks which impacts all aspects of the
agricultural supply chain, particularly in economies dependent on rain-fed agriculture and is
mostly responsible for the variations in the income of the farmers. Even with the introduction
of new crop varieties, production technology such as irrigation and new management
practices which can be utilised to increase yields and improve resistance to weather perils, the
majority of agriculture in developing countries is highly susceptible to extreme,
uncontrollable weather events that can severely impact both quality and yield of a crop. Such
events include excessive or insufficient rainfall and extreme temperatures.
The effects of weather risk are felt most acutely at the household level, particularly by poor,
vulnerable agricultural households. A large majority of them are subsistence farmers.
Traditionally, farmers have managed this risk by adopting certain ex-ante (before the event)
strategies such as using less risky technologies of lower but reliably yielding drought-
resistant crops, by seeking diversification both in terms of production activities on farm and
income generating activities and by devising informal and formal risk sharing arrangements.
These mechanisms may work well for low-magnitude losses, even if they are frequent, they
often prove to be inadequate for risks which are infrequent but severe (like drought, floods
etc.). Weather risks such as ‘drought’ typically affect entire regions at once, which in a way
renders all informal risk sharing arrangements like inter-household transfers, local credit and
asset markets insufficient. Affected farmers are often forced to employ short term coping
strategies i.e. ex-post strategies (after the event) such as migration, borrowing from money
lenders or neighbours, selling assets, or cutting already small expenditures on household
goods and services. Moreover, during such distress periods the cash inflow from the other
alternative sources also falls below the average levels, for example most of the small and
marginal farmers of the affected area would migrate to the neighbouring areas to work as
daily wage labourers, which further results in an abundant supply of labour to these areas and
hence wages offered to the labourers is below the normal levels.
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There can be many instances where farmers could benefit from investing in agricultural
activities that require higher initial investments and hence would generate higher income, ‘if’
the risks affecting these investments such as weather could be managed. Various other
entities which are an essential part of the agricultural supply chain, such as banks or other
intermediaries (middlemen, traders etc) that work with agricultural producers carry the same
risks as their agricultural clients. Hence, they are also hesitant to invest in agriculture due to
potential defaults during or after such an event. Therefore, there is a need for various efficient
risk management instruments that would transfer the risk to insurance markets allowing
growers and agribusinesses to protect themselves against risk, to have a greater ability to plan
for the season, and to access credit [Michael Roth, Swiss Re]. UNDP’s human development
report also suggests that moving towards poverty reduction requires not just the generation of
growing and sustainable income streams among the poor, but also protecting these incomes
through effective risk management - a complementary, twin-track approach. It can therefore
be inferred that the resilience of the farmers and other entities in agribusiness to the weather
shocks can be strengthened if these risks can be managed efficiently through innovative risk
management mechanisms along with other investments in the sector.
1.1 The Micro Insurance Market
Taking inferences from Dr.C.K.Prahlad’s work “The fortune at the bottom of the pyramid”, it
is known that the micro insurance market per se’ operates at the bottom of the pyramid (BoP)
on the “high volumes – low margins” principle. If the “twelve principles of innovation for
BoP markets” [C.K.Prahlad, 2005] are applied to micro insurance, then following points are
essential for the micro insurance products:
1. A good quality product has to be delivered to the target customers at lower price i.e. low
premium amount.
2. Advanced technologies like smart cards, biometric cards and kiosks can be combined
with the existing infrastructure.
3. Some other benefits like in-kind benefits or other incentives can be provided with the
product.
4. The product should be delivered till the very last mile in the villages so that the poor do
not have to incur any transaction costs for accessing the product like transportation and
opportunity cost of lost wage.
5. Developing simple and easy-to-understand products and reducing the labour cost
involved by simplifying the operations.
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6. Creating consumers through education and raising awareness through innovative
mechanisms.
7. Collaborate with other organisations already present in the market and transacting with
the rural poor and leverage on their existing infrastructure for combating the greatest
challenge in the BoP markets i.e. distribution of products. This strategy not only helps in
distribution but also in cutting down the transaction costs.
1.2 Types of Weather Risk Management Instruments:
There are only a few insurance mechanisms which deal efficiently with weather risk.
Traditional, multi-peril crop insurance, often excludes systemic weather factors such as
drought. When weather is included, these traditional programs determine payouts through
loss assessments performed through costly and time consuming individual farm visits that
evaluate the damage of a weather event on a farmer’s field. In developing countries, like
India the costs associated with these types of assessments are higher, due to small farm sizes
and poor transport infrastructure.
Area Yield Crop Insurance:
The traditional area-yield based crop insurance in India was the initiative of the government
and has been into existence for the past two decades. This scheme was first launched as
Comprehensive Crop Insurance Scheme (CCIS) during 1985-1986 and was then launched as
the new and improved National Agriculture Insurance Scheme (NAIS) in the year 1999-2000.
It intends to encourage the farmers to adopt progressive farming techniques, high value and
high quality inputs along with the new and improved technology. The product attempts to
cover the whole spectrum of risks that are related to crops be it weather (Deficit or excess
rainfall, temperature, strong winds etc.), pest attacks or other environmental risks. NAIS is
delivered through rural public sector banks wherein it is tied up with the micro loans, but it is
available for both i.e. the loanee as well as the non-loanee farmers, irrespective of the size of
their land holdings. There have been a number of cases where the farmers are totally unaware
of the fact that they are insured, even if the farmers are aware they do not have the knowledge
about the various technical details of the product. This product is offered across the country
(19 states and 2 UTs) on the same premium rate whereas there is huge variation in the
amount and type of risks faced by the farmers in different parts of the country. This leads to
the problem of cross subsidisation. The claim process comprises of crop-cutting experiments
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(CCEs)1 which in particular, is a very lengthy procedure. This scheme has been criticized on
a number of aspects ranging from administrative to financial (Box 1 features the various
features and drawbacks of the scheme). The figures given in table 1 tend to reveal the
disastrous performance of the scheme which is coupled with its limited expansion in the
scope and content of crop insurance.
Table1: Performance of the area yield based crop insurance in India
S.No: Specifications (for a period of 1985-86 through
1999)
Value
1. Total premiums collected INR 4020 million
2. Total claims paid INR 23,050 million
3. Sum Insured INR 249.2 billion
4. Average per annum claims paid INR 2330 million
5. Loss Ratio (excluding the management expenses) 5.72
1 Crop Cutting Experiments: Each state/UT Government plans and conducts the requisite number of C.C.E's for all notified
crops in the notified insurance units in order to assess the crop yield. It maintains single series of C.C.E's and resultant yield estimates, both for Crop Production estimates and Crop Insurance. These C.C.Es are undertaken per unit area/per crop on the
following scale:
UNIT AREA MINIMUM NUMBER OF C.C.Es REQUIRED
Taluka / Tehsil / Block 16
Mandal / Phirka /any other smaller unit area comprising 8-10 villages
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Gram Panchayat comprising 4-5 Villages
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If the 'Actual Yield' (AY) per hectare of the insured crop for the defined area (on the basis of required number of Crop Cutting Experiments (CCEs)) in the insured season, falls short of the specified Threshold Yield (TY), then all the insured
farmers growing that crop in the defined area are deemed to have suffered shortfall in their yield. This scheme provides coverage against such contingency. 'Indemnity' is calculated as per the following formula:
(Shortfall in Yield/Threshold yield) * Sum insured for the farmer where, { Shortfall = Threshold Yield - 'Actual yield ' for the defined Area}
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BOX 1: Features and drawbacks of the government-sponsored area yield crop insurance
scheme in India2
Index based agriculture/weather insurance3:
Weather indexed risk management products represent a newly developed alternative to the
traditional crop insurance programs for small and marginal farmers in the emerging markets.
Index-based weather insurance products are contingent claims contracts for which payouts
are determined by an objective weather parameter (such as rainfall, temperature, or soil
moisture) that is highly correlated with farm-level yields or revenue outcomes. Rainfall-
indexed insurance is a good innovative solution for regions where widespread crop losses are
caused by drought or excess rainfall. In such regions, rainfall can be used as a good proxy for
the actual losses incurred by farmers. The underlying index used for an index insurance
product must be correlated with yield or revenue outcomes for farms across a large
2 Source: A Review of Past Crop insurance Experience in India by BASIX Insurance Unit.
3 Source: World Bank, Agriculture and Rural Development
1. The product attempts to cover a whole range of risks related to crops, making it prone to
the widespread problem of moral hazard
2. The product is tied to the crop loans given by the rural public sector banking system.
3. The extent of sum insured is linked to the loan size. Because terms of the insurance
policy are sometimes not communicated properly, many borrowing farmers are unaware
that they are insured.
4. Claims are assessed by crop-cutting experiments which entail a huge expenditure,
making the administration of the product costly.
5. The claim settlement process takes a long time (from six months to two years).
6. The financial performance has been unviable, with the claims-to premium ratio as of the
2002 kharif season (June–September) at about 4.17 to 1.
7. The premium rate is uniform for a crop across the whole country, while the risk certainly
is not uniform nationwide.
8. The program’s benefit is not distributed equitably: 58 percent of the claim benefit has
gone to a state (Gujarat) whose contribution to the premium has been 16 percent.
9. The premium is subsidized. Actuarial rates are not charged.
Source: Manuamorn (2007)
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geographic area. In addition, the index must satisfy a number of additional properties that
affect the degree of confidence or trust that market participants have that the index is
believable, reliable, and void of human manipulation, implying that the measurement risk for
the index is low. The desirable feature of the index include: (i) the index construction is
transparent to policyholders, and the realization of the index verifiable to them, (ii) the
calculation of the index is free of tampering or manipulation, (iii) the distribution of the
realization of the index can be accurately estimated, so that the product can be appropriately
priced, and the expected return estimated by potential policyholders (iv) the index can be
measured at low cost, and calculated in a timely manner, and (v) the realization of the index,
or a transformation of the index, is highly correlated with household income and consumption
(vi) the index is stable and sustainable over a period of time with good historical data.
Publicly available measures of weather variables generally satisfy these properties. Index-
based insurance is less susceptible to some of the problems intrinsic in traditional multi-peril
crop insurance. Because of the fact that payouts for indexed contracts are automatically
triggered once the weather parameter reaches a pre-specified level, the insured farmers
receive timely payouts. The automatic trigger reduces administrative costs for the insurer by
eliminating the need for tedious field-level damage assessment (which exists in case of
traditional crop insurance). These features of the indexed products help in cutting down the
administrative costs, which further results in lower premiums and an affordable product for
the farmer. However, it should be kept in mind that the index-based alternatives provide
partial cover by protecting against specific perils like deficit rainfall and are therefore a part
of a complete risk management package4. The objective and exogenous nature of the weather
index prevents “adverse selection5” and “moral hazards”6 (Table 2 indicates various
advantages and challenges for index-based insurance). Indexed products also facilitate risk
transfer to the international markets, because international reinsurers are likely to provide
4 The risk management strategy comprises of formal and informal mechanisms of prevention, reduction, mitigation, coping,
and adaptation. They can be classified as ex-ante (before the event) and ex-post (after the event) and the instruments can be
market based solutions or provided by the state (public sponsored). Insurance is a predominant ex-ante formal mechanism to
manage “production risks”.
5 Adverse selection - farmers know more about their risks than the insurer, leading the low-risk farmers to opt out and
leaving the insurer with only bad risks.
6 Moral hazard - farmers’ behaviours can influence the extent of damage that qualifies for insurance payouts i.e. farmers will
always know more than the insurer about their actual yields and farm practices, they could influence farm data and output, or
only avail of the products when a claim is more likely.
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better terms when the insurance is based on measurable weather events instead of farm-level
losses.
Table 2: Advantages and Challenges of Index-Based Insurance [World Bank 2005]
Advantages Challenges
Reduced moral hazard
The indemnity does not depend on the
individual producer’s realised yield.
Basis risk7
Without sufficient correlation between the
index and actual losses, index-based
insurance is not an effective risk management
tool. This is mitigated by providing self-
insurance of smaller basis risk by the farmer;
offering supplemental products underwritten
by private insurers; blending index insurance
and rural finance; and offering coverage only
for extreme events.
Reduced adverse selection
The indemnity is based on widely available
information, so there are few informational
asymmetries to be exploited.
Precise actuarial modelling
Insurers must understand the statistical
properties of the underlying index.
Standardized and transparent structure
Insurer could apply uniform structure of
contracts.
Education
Lots of information is required by users to
assess whether index-based insurance will
provide effective risk management.
Availability and negotiability
Standardized and transparent, index-based
insurance can be traded in secondary
Market size
The market is still in its infancy in
developing countries and has some start-up
7 Basis risk is the risk of choosing a wrong base for settlement of the claim. In weather insurance, there can be two sources
of basis risks:
i) Basis risk of Weather Station – Most weather insurance policies provide for payment of claim based on the rainfall or temperature recorded at the IMD’s observatory in the district. Weather, especially the rainfall in India varies spatially as well as temporally within a small distance. Weather at the IMD’s observatory is thus
a poor proxy for the weather at the village where the insurance is given.
ii) Basis risk of cover design – Many weather insurance products are designed to provide compensation for the
adverse weather conditions irrespective of the crop sown. Also, some other weather insurance designs cover
only rainfall or deficit in rainfall. Insurance structures like these would invariably result in many occasions where farmer is getting the claim without any crop loss or not getting a claim in spite of crop losses on
account of weather conditions.
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markets. costs.
Reinsurance function
Index insurance can be used to more easily
transfer the risk of widespread correlated
agricultural production losses.
Weather cycles
Actuarial soundness of the premium could be
undermined by weather cycles that change
the probability of the insured events
Versatility
Index products can be easily bundled with
other financial services, facilitating basis risk
management.
Microclimates
Rainfall or area-yield index-based contracts
are difficult to be used for more frequent and
localized events due to microclimates.
Forecasts
Asymmetric information about the likelihood
of an event in the near future will create the
potential for inter-temporal adverse selection.
2. STUDY AREA
2.1 Dungarpur District:
As specified by the planning commission’s report on Backward Districts Initiative (BDI)
under the Rashtriya Sam Vikas Yojana (RSVY)8, the identification of various backward
districts in different states of India has been made on the basis of an index of backwardness
comprising of three parameters with equal weights assigned to each: (i) value of output per
agricultural worker; (ii) agriculture wage rate; and (iii) percentage of SC/ST population of the
districts. Three districts out of a total of thirty two in Rajasthan feature in this list of RSVY
namely, Banswara, Dungarpur and Jhalawar.
The data provided by the Directorate of Economics and Statistics, Government of Rajasthan,
reveals that Dungarpur when compared with other districts of Rajasthan features as a district
with lowest levels of per capita income, average land holding, human development index
[Chart 1, 2, 3] and simultaneously has a high percentage of population as scheduled tribes.
8 The Backward Districts Initiative under the Rashtriya Sam Vikas Yojana was initiated with the main objective of putting
in place various programmes and policies with the joint efforts of the centre and the state governments to remove barriers to growth, accelerate the development process and improve the quality of life of the people. The scheme aims at focused
development programmes for backward areas which would help reduce imbalances and speed up development. The scheme
covers 100 districts where the number of districts per state has been worked out on the basis of incidence of poverty. In addition 32 districts affected by left wing extremism are also covered.
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Though other basic infrastructural facilities are available as per the records but as far as the
accessibility and the quality of these facilities (hospitals, schools, markets etc.) is concerned
there is a lot that needs to be improved. Table 3, provides some more statistics about
Dungarpur.
Chart 1: Per Capita Income
Chart 2: Average Land Holding (Hectares)
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Table 3: Dungarpur district at a glance
S.No: Item Year Unit India Rajasthan
1 Gross Domestic product
At constant prices + 2007-08000
Crores Rs.3114.45(
A) 118.34(A)
2 Per Capita income at
Constant prices + 2007-08 Rs.24256
(A)16260 (A)
3 Life Expectancy At birth
(i) Male 2001-06 Years 63.9 62.2
(ii) Female 2001-06 Years 66.9 62.8
4
Vital rates based on
SRS(Estimate)
(I) Birth rate 2006 Per' 000 23.5 28.3
(ii) Death rate 2006 Per' 000 7.5 6.9
(iii) Infant mortality rate 2006 Per' 000 57 67
5 Geographical Area 2001 Lakh Sq.Km. 32.87 3.42
6 Population 2001 In Lakhs 10286.1 565.07
7 Population Density 2001 Per Sq.Km. 325 165
8
% of urban Pop. to total
Population 2001 Percent 27.8 23.4
9
% of S.C. Pop. to total
Population 2001 Percent 16.2 17.2
10
% of S.T. Pop. to total
Population 2001 Percent 8.2 12.6
11 Literacy 2001 Percent 64.8 60.4
12 No.of Bank OfficesSept.,
2007
Per Lakh of
pop. 6.3 5.6
13 Per Capita bank DepositSept.,200
7Rs. 25018 10047
14 Per Capita bank CreditSept.,200
7Rs. 17891 8170
Source: Directorate of Economics and Statistics, Govt. of Rajasthan
Dungarpur [annexure 1] as a district can be characterized by tribal habitation practising
subsistence rain fed farming on hilly and undulated terrains. This district has been divided
into five blocks i.e. Aspur, Beechiwara, Dungarpur, Saagwara and Seemalwara, of which
Aspur and Saagwara can be significantly differentiated from other three blocks in a number
of aspects ranging from socio-economic, cultural to demographic. As is evident from the
table 4, the habitation pattern in Aspur and Saagwara is totally different from the other three
blocks as majority of the villages have a mixed population comprising of communities like
A: Advance Estimates, Q: Quick Estimates
+: Base Year 1999-2000 SRS: Sample Registration System
Pop: Population
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Patidars, Tribals (Meenas), Rajputs, Jains, Brahmins, Sewaks etc. whereas most of the
villages in other blocks are completely tribal. Moreover, due to relatively plain areas in Aspur
and Saagwara, the farmers have large landholdings with most of the villages having the
advantage of canal irrigation facilities and comparatively villages in other blocks have small
and scattered land holdings because of the hilly terrain and most of the farming is rain fed.
Hence, there exists a need for innovative risk mitigating instruments alongwith sustainable
sources of income so that the quality of life and livelihoods of the residents of Dugarpur is
improved.
Table 4: Major differences between the blocks of Dungarpur district
PARAMETER ASPUR & SAAGWARA OTHER BLOCKS
COMMUNITIES Patidars, Tribals (Meena), Rajputs,
Sewaks, Jains and Others
Mostly Tribal (Meena/Bheels)
IRRIGATION Mostly canal irrigated, some of the
villages are also affected due to
water seepage in the fields through
these canals. Irrigation through
canals has benefited many villages
of the area.
Mostly rain fed.
LAND TYPE Relatively plain land with saline
soil.
Undulated hilly terrain with
acidic soil.
LAND
HOLDINGS
Relatively large land holdings.
Small and scattered
landholdings.
Source: CII
2.1.1 CII - Dungarpur Initiative
The CII - Dungarpur initiative aims at the development of the backward districts of India
through Public-Private-Community-Partnership (PPCP) by proactive business interventions.
The conceptual framework of this initiative evolved through a multi-stakeholder dialog under
the CII-UNDP India partnership forum. Annexure 2 and 3 shows that CII has managed to
rope in a lot of public and private players for the proposed development of the district.
Activities ranging from demonstration trials for different crops, quality agri-input supply,
formation of water user groups for efficient utilization of water, agri-produce marketing and
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IT education along with weather advisories are undertaken by various CII partners in
different areas of the district.
CIRM has been one of the partners in this initiative and it has identified that it is really
necessary to have some risk management infrastructure in place for the intended development
of the area. Consequently it intends to device an Index based weather insurance product for
the farming community in the district which would take care of their possible losses in the
farms. Further it wishes to study the larger issues associated in rolling out weather insurance
products for such farmers like high premium rates, basis risk, low-scale, and last but not the
least the unavailability of quality infrastructure for weather monitoring and data collection.
To delve upon all these issues it has collaborated with Weather Risk Management Services
Pvt. Ltd (WRMS) and Ingen Technologies which would take care of the weather related
technical aspects of designing such insurance.
The risk management initiative would be carried out in phase wise manner, first phase being
a pilot phase. During this, CIRM has planned to install two weather stations in the Aspur
block of Dungarpur district. These weather stations would help in generating all the relevant
data of the areas for which the weather insurance product will be launched. The next phase
would be an iteration of the first phase in a larger context whereby around 18 more stations
would be launched to cover the whole district.
2.1.2 Village Profile:
This study covers a total of four villages in Aspur block of the Dungarpur district namely,
Bodigama Bada, Oda, Pachlasa Bada and Punjpur [annexure 1]. CIRM along with its partners
intends to develop the product which suits the needs of the villagers across the five blocks of
Dungarpur and Aspur had been selected as the study area on the basis of the presence of CII
facilitators. Furthermore, the selection of the villages was done by considering the major
differences that exist in the villages across different blocks of the district. Hence, it was
imperative to assess the probable socio-economic, agricultural and demographic
characteristics of the villages in other blocks in contrast with that of the villages in Aspur and
in a way select a representative sample. As mentioned in Table 4, the villages of other blocks
are differentiated mainly by the tribal population and rain-fed farming, so villages Oda and
Pachlasa Bada were selected to conduct the study as they matched the criteria to some extent.
Villages Bodigama Bada and Punjpur could typically represent many villages of Aspur and
23
Saagwara block, as these villages are inhabited by a number of communities, have proper
irrigation facilities etc. The major differences across the sample villages and the sampling
plan are shown in annexure 7 and table 5 respectively.
2.1.3 Community Profile:
• Tribal community: Dungarpur is often described as a backward tribal district; the tribal
population forms a major chunk of the total population in the district i.e. approximately
65% (census 2001 data). The tribal population, as understood from the people residing in
the villages covered under the scope of the study, when compared with other communities
are economically and socially a backward community and want to stay with their beliefs,
customs, age old practices and myths. The literacy level is relatively low in comparison
with other communities residing in the same areas. Most of the tribal farmers practice
subsistence farming and are not very convenient in adopting new farming techniques,
whereas the young generation is very enthusiastic in adopting new methods to improve
the yields. The role of women in decision making is considerable. In most of the
decisions related to household activities like marriages and sale/purchase of assets women
in the household are consulted.
• Patidars and Rajputs: The Patidars and Rajputs are the “higher castes” and are
economically better off, compared to the tribal population. People are very
entrepreneurial in nature and like to take risks when it comes to either venturing out by
opening new small businesses in nearby cities like Ahmedabad or Mumbai or opting for
sending their family members for taking up jobs in cities. Farmers of these communities
in contrast to the tribal farmers like to try new and latest farming techniques to improve
the yields and are also interested in trying new crops. The role of women in decision
making is very limited. These people have a high sense of belongingness to their
communities, as they try to maintain the status of their household at higher levels within
their community. Many farmers have the perspective that even if a household is going
through a tough time they would not like to disclose that in the community for taking
help. People would always get together for community meetings and donate for various
religious and community programs, depending on their financial condition.
24
3. OBJECTIVES
1. To conduct need analysis of farmers for the weather insurance product.
2. To develop a consumer profile of the potential users and non-users of the product by
capturing socio-economic, demographic and psychographic aspects.
3. To identify factors affecting the acceptability of the product.
4. To analyse the potential of the probable partner organisations and recommend a
suitable partner for selling the weather insurance product in the district.
4. METHODOLOGY
The methodology adopted for this study included both qualitative as well as quantitative
techniques. To capture the relevant socio-economic and demographic aspects of the villagers
for the study, a combination of various tools such as unstructured in-depth interviews, PRA
tools and focussed group discussions were used. The primary data generated through these
exercises helped in developing the questionnaire for the household survey, wherein these
qualitative findings were substantiated through a descriptive analysis.
The fieldwork in Dungarpur began in the last week of June, 2008. In the beginning brief
meetings with various community leaders of the villages helped building up the rapport
required for conducting the data generating exercises in the villages.
4.1 Qualitative Phase:
Tools used for primary data collection:
i. Unstructured & Semi-structured Interviews: During the first few days of my stay in
Dungarpur, I spent a lot of time with the villagers so as to get a clear understanding of
their culture, beliefs and attitudes. These interviews with the potential users/non-users
helped in generating a lot of information relevant to the study and in understanding
the realities at the village level.
ii. PRA Tools:
a. Social and Resource Mapping: This exercise was conducted to get a fair idea
about the communities in the village and their resource base. The social and
resource map drawn by the villagers included the various social structures,
25
institutions, location of religious or different ethnic groups residing in the
village and the presence of resources like agriculture land, water, fuel wood
etc. The purpose behind conducting the exercise was to learn about the
perception of the villagers regarding social structures in the village, the
differences among the households by ethnicity, religion, wealth, and the
access and availability of various resources. This exercise was also utilized to
locate educated households, female headed households amongst the different
hamlets or communities. [annexure 4]
b. Seasonal Matrix: This exercise was conducted to learn about changes in
livelihoods over the year and to show the seasonality of agricultural and non
agricultural workload, food availability, human diseases, gender-specific
income and expenditure etc.
c. Income and Expenditure Matrices: This tool helped in identifying and
quantifying the relative importance of different sources of income and
expenditures and to measure the vulnerability of households. [annexure 6]
d. Venn Diagrams (Institutional): This tool was specifically used to figure out
some of the important institutions and individuals that as per the perception of
the villagers are accessible and work closely with the villagers on various
issues.
e. Venn Diagrams (Village relationships): This tool was used for measuring the
various factors that affect the relationship of a particular village in terms of
level of cooperation with its surrounding villages. The specific purpose of
conducting this exercise was to figure out the impact of village relationships
on the demand for weather insurance product in the presence of Basis risk.
iii. Focused Group Discussions: The discussions were conducted with the motive of
generating more relevant information and also to triangulate the information
generated through the PRA exercises. These discussions were conducted in all the
four villages with the number of participants varying from twelve to twenty in all,
wherein the participation was dependent on different variables like the social setting,
venue for the discussion etc. The discussions helped in generating the information
primarily about the general issues, problems or shocks faced by the villagers, the role
26
or intervention of various agencies and individuals, awareness about insurance
products, factors which hinder or facilitate the adoption of the insurance products etc.
[annexure 7].
4.2 Quantitative Phase:
i. Questionnaire: Field visits to the sample villages, the results of previous PRA
exercises, exploratory interviews with the community, interaction with the active
members of the various village institutions, focussed group discussions helped in
designing final questionnaire for the household survey [Annexure 5]. The
questionnaire was designed on a questionnaire template provided by the Centre for
Insurance and Risk Management. The final questionnaire aimed at covering the
following issues:
a. The socio-economic, demographic and agriculture related aspects of the
villagers (Section I);
b. Along with their awareness about various insurance products, their response
towards the actual product concept was also recorded (Section II);
c. The details of the shocks faced by the villagers and hence the kind of
strategies adopted by them to cope up with the impact of these shocks (Section
III).
ii. Sampling Methodology: A Random Stratified Sampling method was used to take the
sample size for the household survey. Based on the number of households of each
community residing in the villages the sample size was determined. Table 5, indicates
the total number of households (350) across the four sample villages, the numbers
within the parenthesis indicates the sample size of households of that community. As
described earlier, village Oda and Pachlasa Bada were chosen as these villages had
the characteristics of the villages in the other blocks of Dungapur, so the sample size
of households from the tribal community in Pachlasa Bada was deliberately taken
disproportionately. Whereas for village Oda, which has a hundred percent tribal
population the sample size was taken on the basis of status of the family being BPL or
APL. This was done due to the fact that more than fifty percent of the households fall
in the category of below poverty line (BPL).
27
Table 5: Sampling Plan and Size for Household Survey
Village
Community
Bodigama
Bada
Oda* Pachlasa
Bada
Punjpur
Sample** U S U S U S U S
Tribals 52 10 304 75 196 60 62 10
Patidars 126 40 0 0 100 20 157 45
Rajputs 0 0 0 0 202 40 0 0
Others 103 25 0 0 59 5 96 20
Total 281 75 304 75 557 125 315 75
*Detailed sample size for village Oda: BPL: 40, APL: 35
**U: Universe of the sample; S: Actual Sample
5. ANALYSIS & RESULTS:
Conceptually, the demand for the formal insurance products depends on the individual
farmer’s willingness to pay for the insurance premium and the correlation between the actual
payouts and economic losses at the time of adverse weather conditions [World Bank]. In case
of a new product launch in the unknown territories or regions the credibility of the institution
or the vendor selling that product, in accordance with the conceptual understanding of the
product by the target consumer is supposed to be of significant importance. It is also evident
from the case of a pilot product launch by BASIX9 in some villages of Mahboobnagar district
of Andhra Pradesh that most of the farmers who did not opt for the product were not able to
understand the features of the product. Hence, it can be said that prior to the launch of a new
product in a new and unexplored BoP market, the marketeer of the product has to factor in a
number of crucial factors which reinforce each other either in a direct or an indirect manner
in influencing the decision of rural people.
9 In 2003, BASIX formed a partnership with ICICI Lombard General Insurance Company to pilot the sale of rainfall index
insurance contracts to small farmers in the Andhra Pradesh State of India. The project received technical assistance from the
Commodity Risk Management Group (CRMG) of the World Bank and was the first weather insurance initiative launched in
India and the first farmer-level weather-indexed insurance offered in the developing world. In only three years, the small
pilot program with 230 participants graduated into a large weather insurance operation. During the 2005 monsoon season,
BASIX sold 7,685 policies to 6,703 customers in 36 locations in 6 states. This successful experience sparked much broader
interest in weather-indexed insurance in India.
28
The qualitative phase of the project was undertaken to understand the existing ground
realities related to the livelihoods, agricultural practices, perceptions and other psychographic
aspects of the farmers residing in the study area. The participatory approach followed for the
data collection of the qualitative phase really proved to be beneficial in providing various
insights into the lives of the farmers which further was utilised in designing the tools for the
quantitative phase.
5.1 Qualitative Phase - Findings
•••• Product awareness impacts demand
During the various exercises conducted under the qualitative phase, it was observed that the
demand for the formal insurance products depends largely on the awareness about these
products. Awareness is influenced by the eagerness of communities to collect and gather
knowledge about the new schemes and products launched in the villages for their benefits,
followed by the literacy in communities and also the network of the village with the nearby
markets and towns. It became evident due to the fact that many of the farmers belonging to
the communities such as Patidars, Rajputs or Jains were very well aware of the various
insurance products , whereas the awareness levels about these products appeared to be very
low amongst the tribal farmers of the same village who were also participating in the same
exercises.
Social and cultural factors might influence the awareness levels of the farmers, but
educational qualification proved to be another deciding factor when it was analysed that
many of the tribal farmers of village Oda (where the literacy rate is higher as compared to the
other tribal villages of the area) had bought atleast one insurance product in the past few
years. Farmers were well aware of the concept of life and health insurance and some of the
farmers had bought life insurance products for each member of the household. Furthermore,
the connectivity, approachability of the village with other nearby towns, markets, highways
were also found to be one of the factors influencing the awareness levels of the farmers.
Easily accessible villages like Punjpur, which lie on the state highway, are well connected
with towns such as Aspur, Dungarpur, which enables easy information flow from the nearby
towns. A local market has developed in village Bodigama Bada over a period of time which
serves as the sole market for the surrounding 10-12 villages of that area, all the activities,
29
trade from different parts of the block helps the village with a lot of information flow and
sharing.
•••• Accessibility of the vendors is important to farmers
Farmers also revealed that the accessibility of the vendor or the agent selling the insurance
product is very important to them. As per the farmers, the dissemination of information by
the representatives of the organisation regarding the technical knowledge about the product,
weather advisories, and other relevant information about the payouts, claims processing and
product features are important due to the fact that if the information availability is nearer to
the village then building trust between both sides is easier. A number of farmers also believed
that a faithful relationship can be developed with the company or their representatives if a
repeated number of pro farmer transactions are carried out over a period of time.
•••• Risk management strategies determine the need for the product
It was also realised that the array of current risk management strategies which are adopted by
the households might be a deciding factor in adopting the weather insurance product. During
the discussions, a few of the farmers were of the view that there is no need to increase the
household expenditure by buying the weather insurance product as most of the times they
were able to manage the impact of the shock by adopting certain kinds of informal
mechanisms. These mechanisms included migration during lean periods, having an
alternative source of income, maintaining buffer stocks, cutting down on expenditure or food
intake by the family members, sharing the food with their livestock, accessing credit through
various channels and many more. These strategies could either be classified as ex-ante or ex-
post strategies.
•••• The Consumer Behaviour
Analysing the factors that influence the adoption of the weather insurance product through a
marketing perspective also helped in getting various insights about the potential consumer’s
buying behaviour. As described earlier that cultural factors certainly have an impact on
demand for the product, wherein the culture particular to a particular community, the shared
values, perceptions and behaviours of the people of a particular community direct the buying
behaviour of the potential customers i.e. farmers. Moreover, one of the findings of the
focussed group discussions was the influence of various social factors on the demand. A very
30
less number of farmers of the Patidar and Rajput community revealed that one’s status and
role in the society and more so within the community is also one of the determining factors to
buy the weather insurance product. In a typical Indian village all the households of a
particular community are located in each other’s vicinity, where every household has the
knowledge about other households and therefore as per the villagers, maintaining the status or
trying to match up with the other households in terms of lifestyle, associations, groups etc
becomes very important. For example, if some of the farmers of a particular community opt
to buy the insurance product, then it becomes imperative in one way or other for the fellow
farmers of the community to follow suit.
Figure 1: Social factors influencing consumer buying behaviour
Some of the farmers in villages like Bodigama Bada and Punjpur, who have had the
exposure to the weather insurance product of AICL and who can be termed as “risk-takers”
prefer buying the insurance from a gambling perspective or would buy the product if the
results of the previous season are positive i.e. if payouts are made by the insurer for the
previous season (psychological factors). This category of the farmers also include farmers
who don’t have a proper understanding of the product, they buy the product to bet on a
rainfall level and if the realised level of rainfall is below the specified level, they receive the
payout. Furthermore, it was realised that there is a considerable increase in the number of
farmers buying the product if the results for the previous season are positive and payouts are
declared for that region and the same is true for vice-versa. That is to say, if the results for a
particular season are not positive and there are no payouts then the number of farmers opting
to buy the insurance would be lesser as compared to that of the previous season.
31
Figure 2: Psychological factors influencing consumer buying behaviour
The findings of the qualitative study also illustrate the fact that, the personal characteristics of
the farmers like stage of the life cycle, age, affordability and risk aversion also influence the
adoption of the product (Personal Factors). A farmer who needs to take care of the
responsibilities towards his family like getting his children married in the short term, or a
farmer whose significant household expenditure is towards the healthcare of a family member
may opt for saving money for these expenses instead of buying the insurance.
5.2 Quantitative Phase - Findings
• Institutional Interface
A number of presumptions that appeared during the qualitative phase were contradicted by
the results of the quantitative phase. Through the qualitative analysis different institutions
were identified which are more active in providing support to a number of developmental
activities in the villages, these institutions were further categorised as government
educational institutes, panchayati raj institutions and corporate institutions.
Table 6: Categories of the institutions
Category Institutions
Corporate Entities CII, PI industries, ITC e-choupal
Government education institutions Agriculture universities
Panchayati Raj Institutions (PRIs) Gram Sewaks, Panchayats
The study shows that around 93% of the farmers are getting assistance through the various
corporate interventions under the CII project in terms of information, knowledge sharing
about the latest farming techniques. Similarly in case of information provided for agri-
32
produce marketing, the help provided by the corporate entities tops the chart as 89% of the
farmers get this information from either ITC e-choupal, CII [chart 4 and chart 5]. ITC e-
choupal has its 10 centres in different villages of Aspur block and the span of operations is in
a total of 35 to 40 villages, whereas CII along with PI industries has been working in most of
the villages of Aspur block and also covers many villages in other blocks of the district.
Farmers were very much satisfied with the amount and the quality of work being undertaken
by CII but some if the farmers were not convinced with ITC e-choupal’s idea of not
procuring the agri-produce because of some quality parameters.
Chart 4: Information/knowledge about
farming techniques
Chart 5: Information/knowledge about
agri-produce marketing
• Demand for the product
The analysis of the data collected through the household survey in the four villages also
revealed that there is a significant demand for the weather insurance product10, where 78.20%
10
The product concept for the weather insurance product being developed at CIRM was inserted in the questionnaire
(annexure 5) and the surveyors were asked to explain the concept to the respondents.
33
of the respondents feel that they require the product. On further analysis, it was found that
92.85% of the farmers, who want to buy the product, cultivate crops like maize, wheat etc.
which are prone to weather risks. During the qualitative phase of the study many farmers
from the Patidar and Rajput community had the perspective that the Tribal farmers are never
interested in buying such beneficial products. The rationale behind developing this
perspective was that over the years tribal farmers have been receiving a large number of
benefits from various governmental schemes and hence have developed a habit of expecting
government reliefs during the times of distress and also otherwise. Contrary to this belief as
per the survey findings 85.80% of the tribal farmers said that they want to buy the product.
• Reasons for the demand of the product
As per the belief of the local institutions in Dungarpur, the number of farmers opting to buy
the insurance depends upon the positive or negative results of the previous season could not
be substantiated through the findings of the survey, according to which approximately 69% of
the prospective buyers would prefer to buy the product every season, even if there are no
payouts are realised. The reasoning behind this could be that the farmers are able to
Product concept – Weather Insurance
SURVEYOR PLEASE READ:
I would like to talk to you about weather insurance. Choosing to buy weather insurance is a way to protect one from
financial shocks related crop failure due to vagaries of weather. I will read you a concept of a new Weather insurance
product, and then I would like to ask for your opinion about it.
Crops
Amount (in Rs.)
Paddy Maize Wheat Gram
Max Sum Insured =
Cost of cultivation
(per acre)
8000-10,000 6,500 – 8,500 9,000-12,000 4,500-6,500
Premium 700-1,000 595-850 840-1,200 455-650
Coverage: The maximum sum insured would be equal to the cost of cultivation as mentioned in the table above.
Benefit: The product will cover the risk due to both excess and deficit rainfall.
Claim processing: within 30 to 45 days from the day certified data is released. This generally takes between 15 to 20 days.
Proximity: The service will be available in the nearest village. The payouts will be made on the basis of a weather station
which is located within a radius of 5 to 10 kms.
34
understand that if the crop production for the season is normal as expected and there are no
crop losses then there would be no payouts.
While analysing the reasons due to which the farmer community doesn’t opt for buying
insurance products a large number of reasons were cited during the qualitative phase, out of
which it was felt that most influencing factor could be the low level of awareness about the
product. During the quantitative phase, it was known that 52% of the farmers feel that the
lack of information about the products dissuades them from buying the product. The lack of
information about the products includes many factors such as lack of understanding of the
technical aspects of the products, low awareness about the procedure to buy insurance etc.
As shown in chart 6, second reason that prevents the farmers (31%) from buying these
products is the lack of trust in the insurance companies, where some of the farmers feel that
the insurance companies could manipulate the data and subsequently not declare the payouts,
and some of the farmers did not have faith in the operations of the insurance companies as
they might get bankrupt anytime.
Surprisingly the study also shows that affordability does not act as a major hurdle for most of
the farmers in buying the insurance product, as only 6% of the respondents cited affordability
as a reason for not buying the product and about 63% of the farmers who had refused to buy
the product due to the premium amount were of the view that they would change their
decision if the product is priced within the premium range of Rs.100- Rs.200.
Chart 6: Reasons for not taking insurance products
35
• Preference for vendors and information channels
In order to cut down on the transaction costs and to build a strong relationship with the
farming community it is necessary for the insurance companies to opt for an agent (individual
or an institution) which has a good presence in the locality and is accessible to the villagers.
The options mentioned by the villagers during the focussed group discussions on their
preference for the insurance vendor were clubbed in the questionnaire with other options
which included CII partners like PEDO (People’s education and development organisation),
Tata Teleservices etc. The analysis as shown in chart 7 clearly depicts that most of the
farmers would prefer having one of the farmer from their own village as the insurance agent
and around 10% of the farmers would prefer buying the insurance from the SHG’s of the
local NGO i.e. PEDO. In order to find out the most suitable information dissemination
channel for the product, the farmers were provided with the options of the SHGs of PEDO,
Audio/visuals, pamphlets/newspapers and local farmer. It is evident from chart 8 that most of
the respondents prefer to get all the relevant information about the product through the SHGs
of PEDO. Interestingly, a considerable number of farmers would like to have the information
through various audio/visuals like movies, documentaries, advertisements which can be
shown in the villages at frequent intervals of time.
Chart 7: Preference for insurance agent/vendor
36
Chart 8: Preference for information channel
5.3 Selection of Potential Partners
One of the objectives of the study was to analyze the potential of the CII partner
organisations and recommend a suitable partner for selling the weather insurance product in
the district. The weather insurance product being developed by CIRM and WRMS will be
sold through a leading insurance company (AICL or ICICI Lombard) and recommendations
for a potential partner in that area will be given to them. This study suggests that there can be
some more options apart from the CII partners such as local traders and PCO booth operators.
As mentioned in Annexure 2, 3 the CII partners that can be the potential vendor for the
product are as follows:
• ITC e-choupal
• People’s Education and Development Organisation (PEDO)
• PI industries
• Speck Systems
• Jain Irrigation
• TATA Teleservices
The potential of the prospective partners for vending out the weather insurance product was
assessed on the basis of a criterion which was derived from the findings of the twelve
principles of innovation in BoP markets, numerous interactions with farmers and other
37
exercises conducted in the study. Following are the parameters that were included in the
criteria:
a. Presence of the institution in the area: The greatest challenge for the BoP markets is
distribution of the products, so the presence of the institution in the area is extremely
relevant, especially if the product has to be delivered till the very last mile.
b. Spectrum of activities undertaken by the institution: Various types of activities
performed by the institution in the target area are important because of the fact that if
the institution has any activity involving financial transaction with the people than it
becomes easy for the cash flow in terms of payouts for the claims. Moreover if the
institution undertakes activities like creating awareness, education then it becomes the
added advantage as far as creating awareness for the weather insurance product is
concerned. Annexure 2 shows all the activities being undertaken by the CII partners.
c. Accessibility of the institution: The study shows that farmers prefer a vendor or
institution whose representative is accessible and updates about the product can be
disseminated at regular intervals.
d. Resources of the institution: Last but not the least, the availability and the quality of
resources (human, capital and technology) that the institution has in that area works in
their favour for being selected as a potential partner. This is due to the reason that
some of the resources can be leveraged by the insurance provider in distributing the
product.
All the prospective partners were further assessed on the basis of above mentioned
criteria, and as is shown in table 7, the assessments about the accessibility and available
resources with the organisation is done in a relative manner based on the observations in
the field, inputs from the villagers, and the analysis of the data.
38
Table 7: Comparison of prospective partners across key parameters
Parameters
Prospective
Partners
Presence Activities Accessibility Resource
s
ITC e-choupal Limited to Aspur block
1. Agri-Produce Marketing
2. Weather Advisaries 3. Distribution of AICLs
weather insurance product
Average Excellent
PI Industries Limited to Aspur block
1. Agri-Input supply
at subsidised rates 2. Organising
Demonstration trials for different crops in villages
with CII. 3. Organising training
exercises for villagers for better farming practices.
Average Average
PEDO
Present in all
blocks and operating for
the past two decades
1. Promoting the formation
of SHGs in almost every village
of the district. 2. Educating the villagers
about various new farming techniques.
3. Promoting new farming equipments, seed variety
through their SHG network. 4. Promoting education
programs and livelihood
security measures
Very Good Very Good
39
Parameters
Prospective
Partners
Presence Activities Accessibilit
y
Resource
s
SPECK
Systems
Present in 3-
4 blocks and planning to
expand its
operations in
all blocks.
1. Taking NRDMS to target villages through the
IT van (Gramin Vikas Rath). 2. Providing technical
support for design of watershed interventions and
structures.
3. Creating awareness about
new agriculture practices
and other development
programs by organising A/V
shows in the villages.
Good Very Good
Jain Irrigation
Negligible presence and
operations.
1. Initiating the contract
farming for onions in some of the villages of
Aspur Block.
Below
Average
Below
Average
Local Traders
Present in all blocks, and
on an average one
trader caters to the
farmers of 5-
6 villages.
1. The local traders
generally have grocery shops,
departmental stores etc.
2. Traders also lend small
amounts of money to the
villagers at high interest
rates as and when it is
required. Excellent Average
Tata
Teleservices/
PCOs
Present in all
blocks, and
on an
average one
booth caters
to the
population of
2-3 villages.
1. The PCO booths provide
the facility of local and
interstate calls.
2. Mobile phone recharges.
Good Average
A number of CII partners have started their operations in the district but their reach has been
limited to a certain extent. ITC e-choupal had started its operations about two years ago in the
Aspur block with the core activity being agri-produce marketing, but since then instead of
expanding their operations in other blocks, they have stopped the procurement of agri-
produce from their e-choupal centres in Aspur. The option of leveraging on the network of
the local traders in the villages as the vendors of the product can’t be worked out because of
40
the fact that many farmers perceive these traders as exploitative in nature, where they feel
that they would not commit the mistake of buying the insurance product from the traders.
Presence of the network of SHGs in almost all the villages of the district would certainly be
an added advantage for the insurance company in cutting down the transaction costs and
keeping a low premium for the product. These networks would also prove fruitful in
spreading the awareness about the product. Furthermore, the representatives and volunteers
of PEDO command immense respect from the villagers due to their accessibility and their
development work. The IT van (Grameen Vikas rath) of SPECK systems which provides
knowledge about good farming techniques to the villagers can be leveraged for spreading the
awareness amongst the villagers about the benefits being offered by the product through
various Audio/Visuals. SPECK systems also plans to roll out more number of IT vans for
expanding its operations in the mot interior parts of the district, so thee resources can also be
used in selling the product and simultaneously disseminating knowledge related to the
products.
5.4 Summarising Analysis and Results
The expectations of the agri community from the new weather insurance product and the
insurance companies can e summarised on the basis of the analysis of the findings and results
of both the phases of the study, and they are as follows:
1. Farmers need a weather insurance product which would cover the most of the
production risks attached to agriculture. This is an obvious demand as the farmers
would like to be secured against every possible production risk like, drought, excess
rains/floods, pest attacks, diseases etc. When analysed through the insurance
companies’ perspective, it would be a difficult task to offer a product covering all
possible risks and keeping a low premium amount simultaneously.
2. Farmers need weather stations which are accessible for verification of data and most
importantly they feel that if the weather stations are located near to their village, the
data collected would be more accurate. There is also a sense of psychological
satisfaction behind this argument, where in the farmers feel more secured and
satisfied if they can verify the data by themselves.
3. Farmers feel that the claim settlement process is an extremely lengthy and
bureaucratic process, where the farmers would have to deal with various technical
aspects of the insurance products. In short, it can be said that farmers need a simple
41
product which can be easily understood and the claim settlement process is easy,
faster and less bureaucratic.
4. As mentioned in the study, lack of information acts as the major hindrance to farmers
for buying the product. So, there is a definite need for some representatives of the
insurance company or from the insurance vendor to disseminate the relevant
information about the product to the villagers on a timely basis. The most important
factor here is that the representative should be easily accessible by the villagers.
5. The potential channel partners should be chosen from a long term perspective
considering their network, accessibility, activities and the resources in the Dungarpur
district and based on this criterion either PEDO or SPECK systems can be selected.
6. CONCLUSION
Developing innovative solutions that can be used as risk management instruments by the
rural poor households seems to be the need of the hour, poor farmer households being the
most vulnerable are acutely affected by the vagaries of nature. They have to cope up with the
losses by adopting a gamut of strategies like migration, taking credit loans, selling livestock
and other assets etc. Introduction of risk mitigation mechanisms like weather insurance may
motivate the farmers in shifting the crops or changing the cropping patters towards the
insured crops, which would further help them reduce the risk in crop production. It may
happen that instead of diversifying the weather risk by cultivating different crops, the farmers
might opt for new crops which give higher outputs, which in turn provides an encouragement
to the various agri-business companies to take interest in the sector and invest.
Farmers of Dungarpur were really excited when the concept of the weather insurance was
explained to them, excited with the features of the product, excited with the support activities,
excited with the option that somebody who is accessible and known to the villagers would be
able to distribute the product. For those who understood the importance of hedging risk, the
introduction of this product which provides a cover for most of the production risks and is
also affordable, meant a lot. Many presumptions about the tribal community like that the
tribal farmers would never prefer to spend money for any insurance products were falsified
by the study where a significant demand for the product is from the tribal farmers.
42
The pilot launch for the product can be done in the Aspur block of Dungarpur district because
people in many villages are aware of the concept as AICLs product has been present for over
two years. However, a need exists for reaching out to a large number of villagers who are
absolutely unaware of the benefits that can be derived from the insurance products. The study
indicates that most of the farmers do not buy insurance only due to lack of knowledge about
the product and for most of them affordability is not a constraint to a certain extent. The
distribution of the product can be done through PEDO’s SHG network or through SPECK
systems’ IT van (Grameen Vikas Rath) and simultaneously costs could be brought down by
leveraging on their resources and network in the villages of Dungarpur.
7. LIMITATIONS
a. Study concentrated in Aspur block: The study was concentrated in the four villages of
Aspur block. It is evident from table 4, that villages in this block are far different from
those in the other blocks of the district. The weather insurance product being designed
by CIRM & WRMS under the CII-Dungarpur initiative is to be launched in all the
blocks of the district over a period of time. So there was a need to cover villages from
the other blocks in the study, which was not possible due to constraints like
unavailability of the CII facilitators in other blocks, duration of time allocated for the
study and a specified budget.
b. Low participation of women in PRA exercises: The findings of the qualitative phase
clearly indicate that the women folk in the tribal households have a considerable role
in household decision making. Furthermore, one of the objective behind conducting
PRA exercises and focussed group discussions was to get different perspectives from
both the men and the women folk of the villages. Various constraints like social
norms, and involvement of women in other obligations resulted in low participation of
the women folk in two villages i.e. Bodigama Bada and Oda and hence, the primary
information from the vantage point of the women folk wasn’t collected as per the
expectations.
c. Lack of trained surveyors: The household survey to be conducted across the four
villages required young educated people, and it was difficult to locate the required
number of people in every village so that the survey is completed within the stipulated
43
period of time. Once the resources were located they had to be trained and monitored
for a period of two days for conducting the survey.
44
8. REFERENCES
1. Hand in hand microfinance bulletin - Volume 2 - Issue (1 July 2008)
2. Patterns of Rainfall Insurance Participation in Rural India, Xavier Giné, Robert
Townsend, and James Vickery, Federal Reserve Bank of New York Staff Reports, no.
302 - September 2007
3. Scaling Up Micro insurance: The Case of Weather Insurance for Smallholders in
India, Ornsaran Pomme Manuamorn, World bank, Agriculture and development,
Discussion Paper 36
Websites accessed:
1. http://www.fenews-digital.com/fenews/20060506/?pg=9 (Accessed on 12.06.08)
2. http://www.ccsindia.org/ccsindia/policy/live/studies/wp0010.pdf (Accessed on
12.06.08)
3. http://www.weather-risk.blogspot.com/ (Accessed on 16.06.08)
4. http://www.weather-risk.com/Innews.aspx (Accessed on 16.06.08)
5. www.globalrisk.com (Accessed on 17.06.08)
6. http://www.munichrefoundation.org/StiftungsWebsite/Projects/Microinsurance/2006
Microinsurance/Microinsurance_Compendium.htm (Accessed on 20.06.08)
7. http://siteresources.worldbank.org/DEC/Resources/WeatherInsuranceInSemiAridIndi
a.pdf (Accessed on 20.06.08)
8. http://statistics.rajasthan.gov.in/ (Accessed on 14.07.08)
9. http://cii.in/menu_content.php?menu_id=566 (Accessed on 16.07.08)
10. http://des.kar.nic.in/cis/Guidelines.pdf (Accessed on 19.07.08)
11. http://indiabudget.nic.in/ (Accessed on 19.07.08)
12. http://mapsofindia.com/maps/rajasthan/districts/dungarpur.htm (Accessed on
10.08.08)
46
Annexure 2
Private-Public-Peoples Partnership Convergence Chart-CII
Objective Activity Responsible
Agency
1. Access to water
for farmers in rain
fed areas.
1. Participatory Micro Planning and Resource Mapping
(PRM) in Charwada Panchayat.
2. Upscaling micro planning in a cluster of Panchayats on
Milli watershed basis, which includes Charwada.
3. Carry out similar exercises in one cluster of panchayats
in each of the remaining blocks.
4. Watershed based treatments.
5. Land and water use plan on watershed basis.
6. Formation of water Users Groups to ensure assured
water to every family for at least 1 to 2 bigha land
CII
2. Agriculture
Technology
Transfer in canal
command areas as
well as rain fed
areas.
1. Development of ICT material for educating farmers on
improved agricultural techniques for major crops of the
district.
2. Controlled Crop Demonstration trials, two trials each
village (26 villages of ITC command area and 4 villages of
Charwada cluster of panchayats)
3. Development of local trainers through rigorous
classroom as well as field trainings.
4. IEC campaign in adjoining panchayats of Charwada.
5. Exposure visit to Jain campus, Jalgaon.
6. Replication of same Agriculture Technology Transfer
activity in other clusters of panchayat in other blocks taken
up for micro planning.
PI Industries
3. Promotion and
Motivation of
farmers (SHGs) to
adopt improved
agriculture
1. Self paid crop demonstrations with SHGs.
2. Regular trainings at critical crop stages.
3. Weather insurance cover to crop sown.
4. Provide Seed, fertilizers and other input along with
weather insurance cover on credit basis.
PEDO-PI-ITC
47
practices.
4.Breed
Improvement in
Milk Route Areas
1. Development of local animal husbandry extension
workers (Gopal) to provide AI, feed Management, health
management related services at the door step of the
farmers.
2. Backward and forward linkages to the gopal centers for
initial five years.
3. Physical Target oriented activities in initial stages.
BAIF
5. Community
Based Integrated
Water and
Agriculture
Resources
Management
through Lift
Irrigation Schemes
1. Development of community based Lift Irrigation
System.
2. Induction of energy saving Grundfos pumps. Grundfos
pumps are 2 times expensive than other available pumps
but the energy saving is in the range of 20-30%. The pay-
back period on additional costs is 1.5 - 3.0 years depending
on site specific pump selection.
3. Capacity building of user group through regular
monitoring and training.
4. Promotion and induction of water saving devices such as
drip and sprinklers.
PEDO/ Jain
Irrigation/Grun
dfos Pump
6. To bridge gap
between demand
and supply of good
quality Seed and
promote seed
production as an
income generating
activity.
1. Introduction of seed production activity preferably with
SHGs in the district.
CII - PEDO -
RSSC (Private
sector seed
companies are
also being
identified)
7. Promote IT
education in the
district.
1. Conversion of 9th and 10th class computer syllabus into
software material.
2. IT education through mobile van.
3. IT training to interested teachers.
4. One bus is Supplied by District Administration and one
from IT department.
Microsoft-
District
Education
Department
48
8. To Provide
Market Access for
Agricultural
Produce
1. Set Up e-choupals (IT Kiosk) in cluster of villages.
2. Agri. Extension services through IT Kiosk.
3. Procurement of agriculture produce at ITC base rates.
ITC-E-
Choupal
9. To Develop road
map for Improving
Crop and Water
Energy
Management in the
district
1. Selected Charwada panchayat of Bichhiwada block for
initial intervention.
2. Controlled crop demonstration trials on major crops of
the area.
3. Introduction of vermicompost technology in the area.
4. Organized exposure visits to local farmers.
5. Identify gaps in watershed development programme.
ICRISAT as
implementing
agency.
Finding from
Coca Cola
Foundation,
Atlanta.
10. Skill Building 1. Notify IMC as autonomous body.
2. Restructuring of Courses as per market demand.
3. Constancy work through ITC as an income generating
activity.
GOR - CII -
ITI
11. Income
generation
through
commercial
Jatropha plantation
on waste land
1. Set up non-profit Jatropha resource center.
2. Establish and demonstrate improved plantation
techniques to promote Jatropha plantation in the district.
3. Establish bio-diesel plant in the district and offer buy-
back guarantees to farmers.
4. Plough back income generated by resource center in to
R&D and extension activity.
Titagarh Bio-
Tech Pvt. Ltd
12. Establishment
of NRDMS
(Natural Resource
Data Management
System) Center
1. Prepare object oriented Geo-referenced digital database
of Natural and other Resources of Dungarpur district on 1:
25,000 scale using SRS and GIS technologies
2. Develop a Geographic Information System to support
the spatial information need of various stakeholders
3. Collect, collate and analyze both primary and secondary
data related to various Natural resources, amenities,
demography and socio-economic status at district / tehsil /
block / village level and prepare related maps in response
to users need assessment.
DST-District
Administration
13. Contract Proposal being developed Jain Irrigation
49
Farming of onion Systems Ltd.
14. Production of
medicinal and
herbal plants.
Proposal being developed Ayurvedic
Drug
Manufacturers
Association
15. Mobile health
unit for preventive
health care and
nutrition services.
Proposal being developed Ayurvedic
Drugs
Manufacturers
Association
Source: CII
50
Annexure 3
CII Dungarpur Initiative: Programme Impact Chart
Company Objective Coverage
ITC- E Choupal Market access to agricultural
produce
10 e-choupal, 35-40 villages,
2000 farmers.
Microsoft. - IT
Bus Programme
IT education to 9th and 10th class
students of 35 remote schools.
3000 Students, 300 teachers
have been trained imparting knowledge to average 50
students each.
PI-Agri Extension Agri Extension and develop local
trainers
30 villages, 30 trainers, 60
controlled crop trials. Almost coverage of 1500-2000 farmers
CII-PEDO-Seed Production
Introduce seed production, create awareness about quality seed,
increase Hybrid Seed adoption level
10 villages, 164 farmers, 45 ha land.
PEDO-ITC-PI-
Improved Agri. with SHG
Improved Agriculture with SHG
members.
175 farmers.
ICRISAT Improved Crop & Water
Management through participatory
crop demonstrations
Directly 60 farmers, indirectly
1400 farmers, 57 controlled crop
trials.
CII-PEDO-Micro
plan
Create basis for up scaling of PI-
ICRISAT-ITC programme.
Five villages - one panchayat
(First phase), up scaling into
cluster of panchayat in next
phase.
Jain Irrigation Training to watershed department
staff of Govt. of Rajasthan
360 officers are to be trained in
9 batches, 4th batch training in
progress.
Source: CII
53
Annexure 5
Household Survey Questionnaire
[0] descriptive identification of sample household
1. state/u.t.: Rajasthan 5. hamlet name/ address
2. district: Dungarpur 6. block:
3. tehsil/town : Aspur 7. name of head of household:
4. village name: 8. name of informant:
[1] Identification of sample household
item
no. item Code
1. Srl. number of sample
village/ block
2. state-region RAJ
3. sample household number
4. Response Code
[2] Particulars of Field Operation
Sl.
no.
item Investigator
1. name (block letters)
2. date(s) of : DD MM YY
survey/ inspection
3. total time taken to canvass
schedule 1 (in minutes)
4. Signature
RURAL
CENTER FOR INSURANCE AND RISK MANAGEMENT
STATE
HOUSEHOLD SURVEY
FIRST ROUND : JULY 2008
HOUSEHOLD/ GROUP SCHEDULE 1
54
[3] Household characteristics
1. No of members in the household
(Household Size)
8. Monthly household income
Less than Rs 500
2.
Household
Occupation(Agriculture/Non-Agricultural Activities as the
main occupation)
Rs 500-999
3. Whether operated any land for
agricultural activities during last
365 days
Rs 1000-5000 4. House type
Kuccha/Pucca/Semi
Pucca
5. Social group [ST/SC/OBC/Gen] More than Rs 5000
9. Monthly household expenditure
6. Are you BPL? (Yes/No)
Less than Rs 500
7.
Are you a member of any SHG
or cooperative? (Yes/No)
Specify
Rs 500-999
Rs 1000-5000
8. Whether Beneficiary of NREG
More than Rs 5000
9.
Are you a beneficiary of any
other scheme from the
government, NGO or other
projects? Specify
[3.1]Proportion of income spent on (percentage):
1. Household expenses (Food, Clothing, Education): ___________
2. Agriculture & Livestock: _________________
3. Marriages Social and religious purposes: ______________
4. Others (please specify): __________________
55
[4]. Family Details (Members):
Codes for Block 4
General education code: not literate – 01,
primary – 02
middle – 03
secondary/senior secondary– 04,
graduate/ and above –05,
Usual Activity Code For rural areas:
self-employed in agriculture-1
agricultural labour-2,
self-employed in non-agriculture-3,
other labour-4,
Service-5
Others-9.
[5] Assets: Land Ownership as on Date of Survey
S.No
of
plot
Area owned (Bighas)
Use (Name of the crops in each
category)
Irrigation source
(Irrigated/rain fed)
Up land
Medium land
Low land
Up land
Medium Land
Low land Up land Medium land
Low land
Season Name of crop
Irrigated/rain fed
Yield
Normal year (KG)
Yield
Drought year (KG)
Yield
Excess rainfall year (KG)
Rabi Wheat
Gram
Sl. no.
Name Relation Sex
(M-1
/F-2)
age
(years)
general education
(code)
usual activity
Principal subsidiary(economic)
status (code)
No. of months worked in last
year
status (code)
No of months worked in last year
56
Kharif Paddy
Maize
Guar
Others
(specify)
Summer
5.1. What crop would you cultivate in Rabi and Kharif next year?
RABI KHARIF
Same as this year Same as this year
Something new Something new
Haven’t thought as yet Haven’t thought as yet
5.2. If there is a crop failure, what helps you the most?
1- Government relief
2- Local trader (baniya)
3- Bank loans
4- Weather insurance
99- Others (Please specify)
5.3. What is the source of information regarding farming practices?
1- Agriculture University
2- CII/PI
3- ITC
4- Gram Sewak
5.4. What is the source of information regarding marketing your produce?
1- Agriculture University
2- CII/PI
3- ITC
4- Gram Sewak
[6] Livestock and Poultry Ownership
S.n
o
Animal Number
1 Milch cows Cross bred
2 Milch cows- Desi
3 Buffalo
4 Bullock
5 Sheep
6 Goat
7 Hen
8 Chicken
9 Others
57
[7] Durable Assets:
Do you have electricity connection? (Yes/No) ------------------------- Sl. No.
Item Owned as on date of survey
Tick , if owned
1. TV
2. Radio
3. Electric equipments
Fan/Bulbs/Tube light
4. Pressure Cooker
5. Fridge
6. Others Record Player/Tape Recorder/Stereo
7. VCD/DVD/Other players
8. Jewellery
[8] How much time does it take you on average to get (using the transport you use the
most often) to the nearest: (in hours; includes all the time usually spent to get there) � Main road _________________
� Telephone that you can use _________________
� Primary health care center _________________
� Local trader (baniya) _________________
� Hospital _________________
� Bank _________________
� College _________________
[9] Transport Equipment Sl.
no
Item No. owned as on
date of survey
1. carts (hand-driven / animal driven)
2. bicycles
3. motor cycles/ scooters/ mopeds
4. cars/jeep/van
5. tractor/ trailers
6. other transport equipment : cycle rickshaws, auto rickshaws , bus, etc
7. total ( items 1 to 9)
58
[10]. Financial Assets (Other than shares and debentures) as on date of Survey
Sl.
no.
Item Yes/No Value
1. government certificates viz. NSC , Indira vikas patra, kisan vikas patra, KCC
2. deposit in post office including national saving scheme deposits
3. deposit in co-operative society/Co-operative bank
4. deposit in commercial bank (SBI, Regional Rural Bank etc)
5. Deposit in self-help group (SHG)
6. Pensions/provident fund
7. cash in hand (At least Rs.500 per month)
8. other financial assets
II. Insurance – knowledge, use and attitude
1. What is the level of knowledge about insurance services?
S.no Response
Tick appropriate
boxes
1. Have you ever heard/read about any insurance service?
If yes, then please tell me if you have ever heard/read about the
following insurance service
2. Health (including illness and accidents)
3. Life (death and disability)
4. Property
5. Crop Insurance (Weather/Rainfall Insurance)
6. Livestock Insurance
2. Have you or any of your family members had a voluntary insurance policy during the
last 15 years? 0 – No
1 – Yes (used to have or have now) 99 – hard to say
2.1 Why not? Please tick on the appropriate reason that the farmer provides.
S.no Response
Tick appropriate
boxes
1 I have never heard of insurance
2 I do not have enough information about insurance
products
3 I do not know how insurance works
4 I do not know where to find insurance
5 I think the insurance agents are too far from the place I
live
59
6 My household has not needed insurance because we can manage problems ourselves
7 I think nothing serious will happen to my family or me
8 I find insurance too expensive
9 I understand that insurance claim realization process is a
very long process
10 I do not trust insurers; I have heard that they do not pay
back.
11 I do not have trust in insurer - heard that insurers do not
pay (manipulate with conditions, etc.)
12 I do not trust insurance companies; they may run away
stealing my money.
13 I do not trust insurance companies, they may go bankrupt
Weather Insurance: Product Concept
Product concept – Weather Insurance
SURVEYOR PLEASE READ:
I would like to talk to you about weather insurance. Choosing to buy weather insurance is a
way to protect one from financial shocks related crop failure due to vagaries of weather. I will read you a concept of a new Weather insurance product, and then I would like to ask for
your opinion about it.
Crops Amount (in Rs.)
Paddy Maize Wheat Gram
Max Sum
Insured = Cost
of cultivation
(per acre)
8000-10,000 6,500 – 8,500 9,000-12,000 4,500-6,500
Premium 700-1,000 595-850 840-1,200 455-650
Coverage: The maximum sum insured would be equal to the cost of cultivation as mentioned
in the table above.
Benefit: The product will cover the risk due to both excess and deficit rainfall. Claim processing: within 30 to 45 days from the day certified data is released. This generally
takes between 15 to 20 days. Proximity: The service will be available in the nearest village. The payouts will be made on
the basis of a weather station which is located within a radius of 5 to 10 kms.
D1. Do you think you need such a product?
1 – Definitely do not need the product 2 – May need the product sometimes
3 – Definitely need the product
60
D2. What do you think about product features?
Sno Item Rating
Strongly
dissatisfied
Somewhat
dissatisfied
Neither
agree nor
disagree
Satisfied Strongly
satisfied
1 The coverage of the
product is adequate
2 Amount obtained is
reasonable
3 The premium is
reasonable
4 Claim processing is easy
5 Provider is trustworthy
6 The provider is located
close by
D3. How willing would you be to buy this product?
1 – Definitely not willing –
2 – Rather not wiling –
3 – Rather willing
4 – Definitely willing
99 – Hard to say (do not read)
D4. Would you recommend this product to your relatives and friends?
1 – Definitely no
2 – Rather no
3 – Rather yes 4 – Definitely yes
99 – Hard to say (do not read)
ASK ONLY TO THOSE WHO ARE WILLING TO BUY
D5. Which crops would you like to insure?
2-Wheat 3-Paddy
4-Maize
5-Gram
6-Guar
7-Barley
8-Moong
9- Soyabean
99 – Hard to say (do not read)
D6. Where would you prefer to buy this insurance?
1 - Local farmer of the same village
2 - Local farmer from a nearby village
3 - Local trader (Baniya)
4 - Local PCO operator 5- PEDO (Mada sanstha)
61
99- Others (please specify).
D7. Where would you like to have all the relevant information regarding this product?
1 – Consultancy from local farmer/ trader
2 – Consultancy from NGO (Mada sanstha)
3 – Audio visuals
4 – Pamphlets/Newspaper/Posters
D8. If there are no payouts, then what would you do for the next season?
1-Buy the insurance once again 2-Would not buy it for next season
3- Don’t know
ASK ONLY TO THOSE WHO ARE NOT WILLING TO BUY
D9. And if the premium is lowered to Rs.___ per crop, how willing would you be to buy
the product?
0 – I will not change my decision
1 – I may reconsider my decision
2 – I would be willing to buy it
D10. Which crops would you like to insure? 2-Wheat
3-Paddy
4-Maize
5-Gram 6-Guar
7-Barley 8-Moong
9- Soyabean 99 – Hard to say (do not read)
D11. Is there any price at which you will change your decision and decide to buy?
0 – No, I am not interested at all
Yes, the price is [_____________] Rs. per crop
62
III. Shock /Risk Survey
1. In the past some years, has this household been affected by a shock (Tick the CODE
of the appropriate shock)—an event that led to a reduction in your asset holdings,
caused your household income to fall or resulted in a significant reduction in
consumption? We would like to learn more about these events.
During last
12 months
period
During last 1-
5 years
period
6 to 15 years
ago
1. Has there
been a weather
or environmental
shock?
Drought
Too much rain or flood
Hailstorm
Pests or diseases and
others
2. From the following given strategies (Ex-ante), what strategies does this
household adopt to avoid the impact of these shocks before they actually occur? Please
tick the appropriate response.
S.No Strategy Never Sometimes Everytime
1. Migrated to other regions
2. Children or other family
members went to work
along with deliberate
reduction in
consumption expenditure
3. Produce differents goods
or perform different
activities at the same
time (Diversify
production or activities)
4. Saved money
5. Saved food grains
63
3. From the following given coping mechanism strategies (Ex-post), what strategies
does this household do to reduce the impact of the shock, if it has already occurred?
Please tick the appropriate response.
S.No Strategy Never Sometimes Everytime
1- Migrated to other regions
2- Children or other family members went to work
along with deliberate reduction in consumption
expenditure
3- Asked for a cash loan
from family member, a friend, moneylender or
work
4- Spent savings or
investments
5- Pawned goods
6- Sold livestock or assets
7- sold house or land
8- Reduce food
consumption or stop
consuming some products
or services
9- Applied for a cash loan
from a bank
10- Take help from
government organizations
11- Take help from NGOs
12- Borrowed from MFI/ Co-
operative Society
13- Didn’t do anything
-----------------------------------------------End of the questionnaire------------------------------------
Source: IFMR – CIRM
64
Annexure 6
Income/Expenditure mapping: All the participants were told to divide themselves into three
groups of poor, middle income and rich households and each group was supposed to identify
its representative. Groups were made to hypothesize a situation where the
income/expenditure of the whole village is Rs.100 per month, and they were supposed to
divide this sum into three different categories of households across various sources of
income/expenditure. Further a mean of all the numbers for all the three categories was taken
to figure out the similarities or differences in the sources of income/expenditure across the
villages. The purpose for taking the mean for all household categories was only to get an
indication of the type of income and expenditure of the villagers.
From the income mapping exercise [table 8] it was inferred that the chief source of cash
inflow in all the four villages was agriculture and livestock rearing, whereas different
alternative sources of cash inflow emerged for all villages. While observing the cash inflow
from NREGS, it becomes evident that ODA and Pachlasa Bada (both having a large tribal
population) have a larger share than Punjpur and Bodigama Bada (Mixed population, mostly
Patidars) for which the secondary source of inflow falls into the category of
migration/labour/jobs. This is due to the fact that many people from the Patidar community
are either self employed in different small businesses in cities like Ahmedabad and Mumbai
or prefer to take up jobs in these cities.
Table 8: Monthly Cash Inflow Chart for Villagers (all the figures are mean values in
INR terms)
Villages
Agriculture
and
Livestock
NREGSMigration/
Labour/jobsOthers
ODA 13.33 6.67 5.00 8.33
Pachlasa
Bada 14.67 4.33 4.67 9.67
Punjpur 16.67 3.33 10.67 2.67
Bodigama
Bada 15.00 3.33 11.67 3.33
The expenditure mapping exercise [table 9] revealed that a large some of expenditure for the
villagers from their income goes towards household activities and their lifestyle, which
includes expenses incurred towards food, transport, clothes etc. Interestingly, it was observed
that a lot of cash outflow was towards the social activities like, festivals, religious activities,
65
marriages etc. If the cash outflow towards education is analysed it can be said that a lot of
findings from the FGDs were triangulated, wherein it is evident that amongst the tribal
villages, the cash outflow of Oda (high literacy rate) towards education is comparable to that
of other villages like Bodigama Bada and Punjpur. All these findings were substantiated by a
descriptive analysis of data collected through the questionnaire [Chart 9, 10, 11].
Table 9: Monthly Cash Outflow Chart for Villagers (all the figures are mean values in
INR terms)
Villages
Agriculture
and
Livestock
EducationHousehold
Expenses
Social
Purposes
ODA 8 5 13.33 16
Pachlasa
Bada 6.67 3.33 16.67 10
Punjpur 10 6.67 6.67 15
Bodigama
Bada 6.67 5 10 7.5
Chart 9: Expenses on household activities and lifestyle
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Chart 10: Expenses on social purposes
Chart 11: Expenses on agricultural and livestock rearing purposes
67
Annexure 7
Details of FGDs
Set of questions:
i. What are the main activities of the villagers?
ii. What are the main problems faced by the villagers?
iii. What are the different shocks you are exposed to- Weather, Health, Life, Market,
Property and others?
iv. Are there any Government or non-governmental interventions/projects in your
community? Are you satisfied with them- why or why not?
v. How do you manage these shocks- do you prepare for these shocks beforehand or
do you just cope with it?
vi. What are the impacts of those shocks?
vii. What are the various things you do in case the event happens?
viii. In your opinion what do you think are the three biggest problems of the village?
ix. Do you know about Insurance and its benefits? Why/Why not?
Participants: The group comprised of both adult men and women, where the group size was
15-18 people.
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Comparison of villages: The comparison of the four villages covered under the study on the
basis of the standard set of questions asked in the discussions is as follows:
Village
Parameter
ODA PACHLASA
BADA
PUNJPUR BODIGAMA
BADA
Location Located in the
interiors of the
block at about 8
kms. from the
state highway.
Village boundary
extends up to
state highway 23,
but most of the
hamlets are
located in the
interior parts
which are
approximately 5
to 6 kms. from
the highway.
State highway
which connects
Dungarpur to
Udaipur passes
through the village.
Located in the
interiors of the
block at about 12
kms. from the state
highway.
Main
Problems
Lack of
sanitation
facilities,
Seepage in farm
lands, lack of
information
regarding
agriculture.
Lack of irrigation
facilities, no
medical facilities,
access to credit,
sanitation
facilities, less
electricity, lack
of information
regarding agri-
inputs, no
available
channels for
marketing agri-
produce.
Bad quality of land,
fragmented land,
bad drinking water,
unavailability of
credit and labor,
lack of sanitation
facilities, attacks of
monkeys on farm
produce.
Lack of irrigation
facilities, Less
electricity, attacks
of monkeys and
pests on farm
produce,
unavailability of
marketing
channels, and lack
of quality
education
institutes,
sanitation facilities,
drinking water, and
problem of
unemployment,
69
unsatisfied with
gram Sewak.
Different
Shocks
Drought, excess
rainfall,
seepage, health
problems.
Droughts,
Excess/Deficit
rainfall, pest
attacks on crops,
death of people
due to lack of
healthcare
facilities.
Excess/Deficit
rainfall, droughts,
pest attacks on
crops and health
problems.
Excess rainfall,
drought (lack of
forage, water
which sometimes
results in loss of
livestock), no
marketing channels
(so selling the
produce at market
prices is a
problem).
GOs/NGOs GOs:
Van Suraksha
Samiti,
Rajasthan
Adivasi Sangh,
Sarpanch, Gram
Sewak,
NREGS.
NGOs/Private:
PEDO, Sadguru
Foundation,
CII, PI
industries,
Gramin Vikas
Trust.
GOs:
Rajasthan
Adivasi Sangh,
Gram Sewak,
Sarpanch,
NREGS.
NGOs/Private:
PEDO, Vagad jan
jagruti sanstha,
CII, PI industries,
GVT.
GOs:
Sarpanch, Gram
sewak, NREGS.
NGOs/ Private:
PEDO, CII, PI
industries, ITC,
Sarita sanstha.
GOs:
Sarpanch, NREGS,
Gram Sewak.
NGOs/ Private:
CII, PI industries,
ITC.
Satisfaction Villagers are
very much
satisfied with
the work of CII
Villagers are very
happy with the
work done by
sarpanch, gram
Villagers are
satisfied with the
performance of the
government
Villagers are not
satisfied with the
work done by
Gram Sewak and
70
and its allies,
PEDO, whereas
the feel that the
work done by
GVT and
Sadguru
foundation isn’t
exactly required
for the village.
Villagers
believe that the
work done by
the Gram
Sewak and
Rajasthan
Adivasi Sangh
are benefitting
the village
tremendously.
Sewak, Rajasthan
adivasi sangh,
whereas people
are not satisfied
with the
contractors of
NREGS.
Farmers are very
much satisfied
with the work
done by CII, PI
industries,
PEDO.
functionaries like
sarpanch, gram
sewak and
NREGS.
Satisfaction levels
pertaining to the
performance of the
NGOs like PEDO,
Sarita sanstha are
high whereas those
related to private
organisations like
CII, ITC is
moderate.
are concerned
about the biased
behaviour of
Sarpanch.
Villagers are happy
with the work done
by CII and its
allies, whereas they
aren’t very much
satisfied with ITC’s
work.
Coping
Mechanisms
People rely on
Govt relief
programs, sell
their assets like
land, jewellery,
livestock, and
even share their
food with
livestock.
People heavily
rely on Govt
relief programs,
Migrate to other
places like
Ahmedabad,
Mumbai for jobs,
take credit from
local
moneylenders
(baniyas), people
sell their assets.
In case of excess
rains shift the crop
from maize to
paddy, Rely on
government reliefs,
take credit from
local
traders/moneylende
rs, and sell their
assets, going to
Mumbai for
starting small
businesses or for
Villagers rely on
the local trader or
moneylender for
taking credit,
practice shared
farming, and sell
assets. Many
people take up jobs
in
Mumbai/Ahmedab
ad or start small
businesses.
71
jobs.
Biggest
Problems
Sanitation,
Seepage into
the farm lands
because of the
canal, Health
care facilities.
Marketing
channels for the
agri-produce,
irrigation
facilities, access
to credit.
Low income levels,
Bad quality
drinking water,
Marketing the agri-
produce.
High
unemployment,
Lack of quality
education and
absence of a Mandi
for marketing the
agri-produce.
Awareness
Levels about
Insurance
Majority of the
people present
were well aware
about Insurance
and many of the
households
have life
insurance
policies.
Very less number
of people (mostly
Patidars) knows
about insurance
and has taken life
insurance
products whereas
the other
communities like
tribals were
totally unaware
about the concept
of insurance.
People are well
aware about
insurance and
many have taken
life insurance.
The tribal
community is very
low on the
awareness levels
about the concept
of insurance though
some of the people
from the
communities have
taken life insurance
products from LIC.
The Patidar,
Brahmin and Jain
community are
well aware about
the Insurance
products.
Awareness
Levels about
Weather
Insurance
They were not
aware about
Weather
insurance but
some of the
farmers were
aware about
crop insurance.
Very low levels
of awareness
about weather
insurance/crop
insurance
products.
People know about
the concept of
weather insurance
because of the
presence of ITCs
(AICLs) product.
People know about
the concept of
weather insurance
because of the
presence of ITCs
(AICLs) product.