The Weather Index Insurance Scheme for Crops: Insights from India

Year 2025, Volume: 31 Issue: 3, 590 - 611, 29.07.2025

Tian Yang Luo

https://doi.org/10.15832/ankutbd.1557827

Abstract

Weather index insurance for crops is considered a beneficial supplement or even a replacement for traditional agricultural insurance products due to its advantages in payout efficiency and transaction costs. Among the countries implementing weather index insurance, India is one of the most representative. This paper briefly reviews the positioning and evolution of India's Weather-Based Crop Insurance Scheme (RWBCIS) within its agricultural insurance system, systematically elaborating on the specific measures and implementation experiences related to product design, operational systems, and supervisory mechanisms. The study finds that India positions RWBCIS as an effective supplement to traditional crop yield insurance, leveraging the synergy between the two by considering geographical location, land distribution, and climate types. The orderly implementation of RWBCIS is supported by comprehensive insurance data, a robust and transparent information platform, refined product design, and an extensive meteorological network. Additionally, the establishment of crop insurance calendars and supervisory penalty mechanisms clarifies the allocation of responsibilities and enhances the stability and sustainability of the insurance market. The policy approach of implementing RWBCIS in India, along with its specific arrangements
in insurance operation mechanisms, may offer valuable insights for the top-level design of agricultural insurance and product innovation in the world.

Keywords

Agricultural Insurance , PMFBY , RWBCIS , Risk Management

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