In Nepal there is presence of scattered household and geographic variations especially in the hilly area, so the cost effective and easily implementable insurance schemes is required.
First would need to be affordable Life Insurance for the poor with universal coverage. There are some lessons that can be drawn from Indian experience. Second would be crop insurance, if it an issue (drought/floods/variability in yields etc). Third would need to be calamity insurance. The insurance products will need to be designed based on study of the local needs and history of events/occurrences requiring insurance.
Thank you Emmanuel for your answer. I am concerning about crop insurance scheme. Which crop insurance schemes either Weather Index Insurance or Area index Insurance suitable for the area where there is scattered household and geographic variation with in short distance. This is the main problem in Nepal especially in hilly areas. Which schemes would be cost effective as well as easy in the implementation?
There are four Ts in risk management: Terminate, Treat, Tolerate and Transfer. The principle of insurance, i.e. "pooling risks over space and time", is not a logical application in managing weather risks in agriculture. Weather risks in agriculture are systemic, and pooling systemic risks has no meaning at all. An insurance company who sells crop insurance products against climate risks is a fool. The government who subsidises crop insurance is more foolish. For a government, crop insurance has no meaning at all, because an insured agriculture has nothing to do with total production. Let's talk about other Ts. Terminate also seems not to have any meaning here. Treat and Tolerate (this includes adapt as well) are the only risk management options in Agriculture. My proposition is "let's put all the agriculture insurance money into developing more adaptive, productive and resilient agriculture system".
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