World Bank2012-03-192012-03-192011-04-01https://hdl.handle.net/10986/2748The broad structure of Modified National Agricultural Insurance Scheme (mNAIS), the main crop insurance program in India, is technically sound and appropriate in the context of India. The NAIS is based on an indexed approach, where average crop yield of an insurance unit, or IU, (i.e., block) is the index used. The insurance is mandatory for all farmers that borrow from financial institutions, though insurance cover is also available to non-borrowers. The actual yield of the insured crop (as measured by crop cutting experiments) in the IU is compared to the threshold yield. If the former is lower than the latter, all insured farmers in the IU are eligible for the same rate of indemnity payout. Individual crop insurance will have been prohibitively expensive, or even impossible, in a country such as India with so many small and marginal farms. Further, the method of using an 'area based approach' has several other merits and, most importantly, it mitigates moral hazard and adverse selection. This report offers detailed analysis of a number of technical and operational issues which should be addressed if mNAIS is to be implemented. GOI is to be complemented on its bold vision of the future of agriculture insurance through modifying NAIS, an action which, if well implemented, has the potential for significant economic and political economy gains. The policy note World Bank (2010) supported this vision and offered specific policy recommendations for mNAIS, with reference to the Joint Group report (2004). This technical report is intended as a complement to World Bank (2010) and also to the previous technical report World Bank (2007a), by offering detailed technical analysis of a number of issues that will be critical to the success of mNAIS.CC BY 3.0 IGOACTUAL YIELDSADEQUATE PROTECTIONAGRICULTURAL INSURANCEAGRICULTURAL INSURANCE SCHEMEALLOCATIONALLOWANCEAUDITSAVERAGE YIELDSBANKBANK LOANSBASIS RISKBENEFITSBORROWERSBUDGETCAPSCASH CROPSCATASTROPHIC RISKSCDCHECKCHECKSCLAIM PAYMENTCLAIM PAYMENTSCLIMATECOMMERCIAL CROPSCONTINGENT DEBTCONTINGENT LIABILITYCONTRACTCONTRACT DESIGNCOST OF REINSURANCECOTTONCOTTON YIELDSCOVERAGECREDIBILITYCREDITCROPCROP INSURANCECROP INSURANCE PRODUCTCROP INSURANCE PROGRAMCROP INSURANCE SCHEMECROP LOSSCROP PRODUCTIONCROP YIELDCROP YIELDSCROPSCUSTODYDEFAULTDEFICITDEMANDDISASTERDISASTER FINANCINGDISASTER REDUCTIONDROUGHTEQUITYFARMFARM MANAGEMENTFARMERFARMERSFARMINGFARMSFIELD WORKFINANCEFINANCIAL INSTITUTIONSFINANCIAL SUPPORTFLOOR PRICEFOOD CROPSFOOD GRAINSFRAUDFUTUREGLOBAL CAPITALGLOBAL CAPITAL MARKETGOODGOVERNMENT FINANCINGGOVERNMENT SUBSIDIESGOVERNMENT SUBSIDYGRAINGROUNDNUTHARVESTINGHOLDINGSHUMAN RESOURCESINCOMEINDEMNITIESINDEMNITYINFORMATIONINFORMATION SYSTEMSINSTRUMENTINSURABILITYINSURANCE CLAIMSINSURANCE COMPANYINSURANCE COVERINSURANCE PAYMENTSINSURANCE PAYOUTINSURANCE PENETRATIONINSURANCE POLICYINSURANCE PORTFOLIOINSURANCE PREMIUMINSURANCE PRODUCTINSURANCE PRODUCTSINSURANCE RISKINSURANCE SCHEMEINSURERSINTERESTINTERNATIONAL REINSURANCEINTERNATIONAL STANDARDSLABOR FORCELANDSLIDESLENDERSLENDINGLEVEL OF RISKLIABILITIESLOANSLOSSLOSS RATIOLOSSESMAIZEMARGINAL FARMERSMARKETMARKET PRICEMARKETSMITIGATIONMOBILE PHONEMODELSMORAL HAZARDOILSEED CROPSOILSEEDSOPTIONOPTIONSPADDYPARTIAL RISKPAYMENT HISTORYPAYMENT SYSTEMPENALTIESPLANNINGPOLICIESPOLICY MAKERSPOLITICAL ECONOMYPORTFOLIO RISKPOST HARVEST LOSSESPOVERTYPREMIUMSPRICEPRICINGPROBABILITY DENSITYPRODUCEPROGRAMSPUBLIC INSURANCERATESREINSURANCE CAPACITYREINSURANCE MARKETSREINSURERSREPLANTINGREPORTSRESERVESREVENUERISK ANALYSISRISK ASSESSMENTRISK ASSESSMENTSRISK MANAGEMENTRISK POOLINGRISK PROFILERISK SHARINGRISKSSCENARIOSSETTLEMENTSHARESOWINGSUSTAINABILITYTEATECHNOLOGIESTECHNOLOGYTIMELY PAYMENTTIMELY PAYMENTSTRANSFER RISKTRANSPARENCYUNDERWRITINGVALUEWHEATYIELDSWorld Bank10.1596/2748