Agriculture Insurance for Climate Change Adaptation and Disaster Resilience in ASEAN

Abstract

The Sendai Framework, the Paris Climate Agreement, and the Sustainable Development Goals (SDGs) highlight the need to protect hard-earned development gains from disaster and climate risks, especially in development sectors having socioeconomic impacts. The agriculture sectors in developing countries face increasing vulnerabilities due to climate change impacts like droughts, heavy or low rainfall, increase in temperature, etc. Frequency of such extreme events traps the farmers in persistence poverty, for generations. The role of governance is critical, both prior and post disaster for resilient recovery. Studies in major rice-producing economies like India and Thailand indicate a clear need to develop the crop insurance market given the challenges in sustaining an attractive and effective subsidy-based mechanism. One of the key challenges in the adoption of crop insurance is the user and provider confidence in the product. Reducing basis risk and expanding the market for index-based insurance are the key to addressing this challenge. This study assesses index-based insurance, social protection schemes and other forms of financing in selected rice-producing economies of the ASEAN region. It also highlights other opportunities and integrated approaches to climate change adaptation and disaster resilience in agriculture.