Agricultural Risk in India: Factors and Recommendations

Summary:

This Risk Report examines agricultural challenges in India exacerbated by several factors, notably, climate change, and poorly designed and implemented government led agro-financing policies. Uncertainties challenging the country include seasonal yield variability, price fluctuation, weak infrastructure, and a limited access to financial services in the form of credit and insurance. A higher frequency of natural disasters – primarily in the severity of flooding and drought – will have the most immediate as well as long-term negative impact on production. The inability to meet population food demands requires an alternative management strategy and overall policy implementation rethink. Alternative viewpoints concerning the lack of risk management tools are examined, and suggest that this insufficiency can be viewed as an opportunity for India to penetrate further into emerging agricultural insurances and commodity markets. The report concludes with a series of recommendations that would provide additional benefits in safeguarding agricultural sectors to promote sustainable growth objectives.