Βuilding resilience of smallholder farmers in Ιndia with yield assurance
Innovative yield guarantee solution for Indian smallholder farmers to incentivise climate smart agricultural practices.
InsuResilience Solutions Fund supports innovative yield guarantee solution for Indian smallholder farmers to incentivise climate smart agricultural practices and contribute to increased resilience against extreme weather events.
(Frankfurt, New Delhi) India ranks among the top five countries vulnerable to natural hazards with high exposure to extreme weather events like floods, earthquakes, cyclones and droughts. In addition, climate models indicate an all-around increase in temperature and rainfall variability across the country. This puts a lot of pressure on the agriculture sector of India, especially on smallholders who make 78 percent of the country's farmers. Thus, it is crucial to build resilience of smallholder farmers to climate change and the risk involved in farming by encouraging them to adopt advanced climate-smart agriculture innovations.
To support this objective, InsuResilience Solutions Fund (ISF), managed by the Frankfurt School of Finance & Management (FS), and financed by KfW Development Bank, signed a grant agreement with Weather Risk Management Services (WRMS), an agriculture risk management company, and INGEN Technologies, a data provider of weather stations, to co-fund the project development and implementation of the yield assurance solution. The project aims to improve the resilience of 100,000 smallholder farmers in India against climate risks and incentivise smart agricultural risk management practices, as well as to scale up the yield guarantee solution for crops such as cotton, chili, paddy, wheat and potato.
Weather Risk Management Services (WRMS) offers SecuFarm - the world’s first smart and sustainable farming solution for smallholders to provide them with farm level yield guarantee and an assured income. The solution guarantees farmers a benchmark yield provided they follow the Package of Practice (PoP) shared with them on the SecuFarm app. If the actual yield is still below the benchmark yield due to any extreme weather attack or crop disease, the farmer is compensated by WRMS, in proportion to the shortfall. This innovative concept allows incorporation of the necessary farm level risk reduction measures in the insurance product design offered by insurance companies and incentivizes smart and sustainable farming practices. This in turn allows to offer premium discount or a higher guaranteed yield to farmers who take the necessary farm level risk management measures. Fees for the yield guarantee are paid by the farmers (without subsidies).
WRMS has offered SecuFarm solution to more than 25,000 farmers in 22 states of India till date. While in certain states farmers are contracted directly by WRMS, in some states the company connects with farmers by partnering with farmer producer companies, agriculture input companies and local banks.