Abstract
Farmers are very poor and vulnerable especially in the developing countries. Farmers face several natural disasters and challenges during the agricultural production. The unavoidable and negative impact of weather could reduce the capacity of production, make farmers unproductive and put farmers into poverty. To face these challenges, weather index insurance could play a significant role but implementing index-based insurance is also challenging. Different stakeholders from insurance companies to government to donor agencies should come forward to protect the agricultural production because agriculture is the main source of food. These stakeholders also need to protect the lives of farmers, and enhance economic growth by implementing weather index insurance. This paper will focus on the present literatures of weather index insurance mainly some basic issues of weather index insurance and the relevance to use this in the context of Bangladesh, the advantages of weather index insurance and the challenges of implementation. Keywords: Weather Index Insurance, Bangladesh, Agriculture, Insurance DOI : 10.7176/EJBM/5-14-74
Highlights
Bangladesh is mainly an agricultural country where agriculture is the greatest contributor in the economy
Due to the unstable economic growth, insufficient institutional support, demographic and geographic characteristics as well as vulnerability to natural disaster creates a challenging environment in Bangladesh
Development agencies and researchers have been experimenting and exploring the opportunities of using weather index insurance to reduce the risk of poor people in the rural areas
Summary
Bangladesh is mainly an agricultural country where agriculture is the greatest contributor in the economy. Due to high damage of the production, farmer faces extreme poverty To protect this sector from the climate change and to save substantial agricultural production, weather index insurance could play a significant role, but it is challenging to implement this index insurance. The country’s agricultural production is mostly affected by natural disaster and extreme weather such as flood, drought, cyclone, and salinity intrusion, which are directly related to the climate change. Government has already taken an initiative to introduce an ‘agricultural insurance’ scheme to provide crop price support to the farmers who are involved with small and medium size farming in the event of crop failure due to natural disaster (Bangladesh Economic Review, 2011).
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