* Research Associate, Director, and Senior Scientist, respectively at National Centre for Agricultural Economics and Policy Research, New Delhi - 110 012.
The efficiency gains from rainfall insurance in India have been evaluated using the time series data on rice yield for different production zones of Uttar Pradesh, Bihar, Orissa, West Bengal, and Madhya Pradesh. In a framework of the portfolio-based insurance model, parameters critical for the financial viability and efficiency gains from an insurance scheme have been estimated. The rainfall insurance has been found to be a viable option for Indian agriculture with efficiency gains of about 17 per cent over the self-insurance in rice. The benefits from the rainfall insurance could further be increased with research on the suitable design of an insurance scheme based upon local needs, causes of vulnerability, and relationship between rainfall and other meteorological variables with household enterprises and income. Rainfall insurance could be used as a vehicle for channelling government assistance more effectively and efficiently to the vulnerable groups of rural people.
Agricultural risks, drought, vulnerability, rice, rainfall insurance, financial viability, social benefits
