Crop Insurance as a Risk Management Strategy in Bangladesh

� Review of past experience on crop insurance introduced in Bangladesh by Sadharan
Bima Corporation (SBC) – methodology adopted, organizational structure, causes of
failure and loopholes.
� Collection of relevant documents about experiences of micro / crop insurance in other
countries, and reviewed them.
� Based on all these reviews, an analysis was done to identify the success or failure of
such schemes.
� In addition, to corroborate these analyses, interviews & discussions was held with
some key personnel of organizations including Shadharan Bima Corporation (SBC).
2.2.1.2 Assessing the risk level in the agriculture sector under future climatic changes
The project team in close cooperation with people in selected project areas identified how
crop insurance fits in with people’s livelihoods and existing risk management strategies and
whether there is an actual demand in project areas for crop insurance. The task was
performed by completing the following steps:
� Based on historical data an analysis on the crop production, natural disaster and
associated losses affecting farmers’ income and livelihood over the last decades.
� Trend and future prediction of climate change and its ultimate effects on the
agriculture sector either directly or indirectly like increased frequency of natural
disaster.
� Development of a methodology to quantify risk for actuarial analysis under future
climatic changes.
� Existing government support, income security and credit schemes for farmers and
their effectiveness.
2.2.2 Primary Data Collection and Analysis
2.2.2.1 Questionnaire Survey and Focus Group Discussion (FGD)
The main purpose of the questionnaire survey and FGDs were to identify in close cooperation
with people in selected project areas how crop insurance fits in with people’s livelihoods and
existing risk management strategies and whether there is an actual demand in project areas
for crop insurance. Specifically it is intended to answer the questions like whether farmers are
able and/or willing to actually contribute to an insurance scheme and what premium would be
reasonable and acceptable for them.
Questionnaire survey was conducted at several levels. The first level of the questionnaire
survey was designed to get response from the farmers, i.e. to understand the demand side of
the program - how demandable crop insurance is and how much the farmers can contribute,
or their preference of organizational structure, etc.
The second level of the questionnaire survey was for the prospective insurer and policy
makers, i.e. Private and public insurance companies, Bank, NGO and govt. officials about
their response to Crop Insurance implementation.
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