Kanchana Wickramasinghe
Climate insurance
for farmers has been a hot topic recently owing to recurring floods and
droughts in agricultural districts in Sri Lanka. In these instances, interventions
are necessary to help farmers adapt to weather and climate changes, using effective
risk management strategies. Global experience has shown that insurance serves
as an important risk management tool in this regard. However, an IPS study
indicated that, in Sri Lanka, climate insurance is not yet considered a popular
risk management strategy adopted by farmers due to issues in supply and demand.
Supply-side issues are related to the indemnity-based crop insurance products offered in Sri Lanka. The study proposed to shift to index-based insurance, to eliminate problems of traditional indemnity-based crop insurance. It further identified the lack of climate data as a main barrier in implementing index-based insurance in Sri Lanka.
