Status of fisheries credit and insurance in India

This paper seeks to analyze and discuss the factors behind poor performance of fisheries credit and insurance in India. Unlike other allied sectors of agriculture where credit and insurance is fairly being utilized, fisheries sector lacks any serious attempts to popularize credit and insurance-based safety net mechanism. There is a huge demand for credit to the fishery sector and also, there is a persistent dependence on informal source for finance. While there are various issues in providing access to institutional credit, there have been innovations too in credit delivery such as SHG's and join liability groups that helped fishers. In spite of the vulnerability in the fishery sector, institutional mechanisms to address risk and uncertainties in fisheries sector in India have not made much headway even though the need to protect the country's fishermen from risk has a been a continuing concern of fishery policy. Insurance is considered an important mechanism to effectively address the risk to output and income resulting from various natural events. Fishery insurance is by far under-utilized in the country and therefore unavailable for majority of the stakeholders in this sector. Besides high level of inherent risks associated with the sector, a number of factors such as dominance of marginal and small operators in the sector, low general and financial literacy, lack of awareness, high administrative and managerial costs for operating in inaccessible areas, poor availability of data on disaster risks, lack of policy and regulatory framework, etc. are identified as the main reasons for unimpressive performance of insurance in fisheries. Awareness should be raised concerning the benefits of insurance for fisher folk, and the acceptation of insurance as a benefit should be increased through promotional activities that target the fisher folk as a group. Insurers could also consider partnering with credit suppliers who provide credit services for the purchase of fishing vessels, equipment and gears. Research and Development efforts on capture fisheries insurance services should be increased through development of partnership among insurance companies, research institutes and fisher folk cooperatives.