Yuga N. Ghimire, Krishna P. Timsina, Ghanshyam Kandel, Deepa Devkota, Dinesh B. Thapamagar, Sudeep Gautam and Bimala Sharma
Socio-Economics and Agricultural Research Policy Division (SARPOD), Khumaltar, Lalitpur, Nepal

DOI

ABSTRACT

Nepalese agriculture is highly dependent on weather conditions; therefore, managing the agricultural risk associated with the climate change is becoming a key challenge to the country. This study was carried out in 2015 and 2016 to assess key issues, challenges and practice of banana insurance in Chitwan district of the country. Census survey was applied for selecting the banana insurer households whereas simple random sampling was employed for selecting non-insurer farmers for collecting the data. A sample size consisting of 60 households (30 insurers and 30 non-insurers) were used for this study. Collected data were further validated through the focused group discussions and key informants survey. Windstorms was found as the major risk associated with banana production. Besides insurance, banana farmers used different indigenous risk management strategies such as staking, thinning, adjustment in planting time to avoid peak storm time, use of wind break plantation, earthing-up and use of wind resistant varieties. Lack of land entitlement of tenant farmers, inadequate monitoring and the presence of moral hazards in both supply and demand side were important issues to be resolved. The econometric analysis revealed that farmers awareness on claim settlement procedure (p=0.007), and group based approach of insurance intervention (p=0.033) were significantly contributing to the adoption of the insurance scheme. Therefore, improvement of current claim settlement procedure including awareness raising through farmers institutions are more likely to enhance adoption of existing agriculture insurance schemes among banana farmers.