Abstract
Agriculture insurance is still taking root, though not new, to mainstream agriculture in Sri Lanka. With increasing market-based interventions in agriculture such as transformation of traditional supply chains to agribusinesses using partnership ventures, forward contract agreements, movement away from input subsidies to cash transfers, the importance and demand for insurance tools have surfaced. This chapter discusses the evolving need for agricultural insurance and addresses implications of concurrent regional and global developments in agricultural insurance on local farming. Performance of public sector and private sector agricultural insurance schemes are discussed. The financial implications of implementing agricultural insurance are illustrated mainly with respect to the paddy insurance scheme. We find that the feasibility of the insurance scheme has been marginally better in Yala season overall as seen in lower loss ratios. The paddy insurance scheme has failed to differentiate the variation of risk by the season and assessed damages and compensations following an alternative logic.
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Notes
- 1.
1 USDÂ =Â approx. LKR 178
- 2.
A key indicator of insurance programs is the Loss ratio. It refers to ratio between the sum of total indemnities and costs of insurance and the total premium collected.
- 3.
This is the ratio between total indemnity and collected premium.
- 4.
Data by cropping season is not available for the period 2005–2013, according to AAIB.
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Prasada, D.V.P. (2020). Performance and Potential of Agricultural Insurance: Global and Sri Lankan Perspectives. In: Marambe, B., Weerahewa, J., Dandeniya, W. (eds) Agricultural Research for Sustainable Food Systems in Sri Lanka. Springer, Singapore. https://doi.org/10.1007/978-981-15-2152-2_16
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