Project Report

Evaluation of Integrated Risk Management Projects,

Institute for Governance, Policies and Politics

(An initiative of Vivek Manthana Foundation)

Prepared for: GIZ

Prepared by

2016

CONTENTS

AcknowledgementListoftablesListoffiguresListofAbbreviationsAcknowledgementContributorsExecutiveSummaryINTRODUCTIONLiteratureReviewRISPbackgroundAboutIntegratedRiskManagement(IRM)IntegratedRiskManagementComponentofRISPGIZ’sIRMinitiativesinIndiaRelevanceoftheinterventionObjectivesoftheevaluationEvaluationQuestionsMETHODOLOGYSamplingEVALUATIONFINDINGSRelevanceImpactSustainabilityEffectivenessStakeholder’sViewSupportingorganization’sviewGrower/Farmer’sviewCONCLUDINGDISCUSSION

AnnexureI-QuestionnaireAnnexureII-DiscussionguideforstaffsofsupportingorganizationsAnnexureIII-DataTables

Acknowledgement

This report is a result of the cumulative efforts of a number of individuals without whom this report would have not been possible. We acknowledge their valuable contributions and thank them for their inputs.

We would like to express our sincere gratitude to Ms. Anushree Haldar and Mr Mithilesh Digmbar of GIZ for their support and cooperation for conducting this study. We would also like to thank all the staff members of the supporting organizations for their help, support and cooperation during our fieldwork. This study would have not possible without support of the famers of Telangana, Maharashtra and Gujarat. We would like to sincerely thank them for their time and patience during data collection.

Our sincere thanks go to all of our field staffs and colleagues at IGPP for their help and support during the design, implementation and report writing process. We thank them all for their support.

Project Team (Institute for Governance, Policies and Politics)

Contributors from Institute for Governance, Policies and Politics Sarada Prasanna Das, Fellow, Manish Tiwari, Director; Ashwini K Swain, Senior Consultant; Reshmi Chakraborty, Associate Fellow, Sushant Mishra, Research Associate; Ruchika Tripathy and Bhavya Sinha, Intern.

ListofTablesTable-1SampleSizedetailsTable-2TypeofriskfacedinagricultureTable-3 FrequencyofoccurrenceoftheserisksTable-4 Amountoflossincurredduetothefollowingin1yearTable-5 ReceivedagriculturalandmarketingtrainingTable-6Typesoftrainingreceivedsince2014Table-7 ModeofreceivingthetrainingTable-8 ImpactoftrainingTable-9Ifyes,changeinrelationwithpreviousFPOafterRISPinterventionTable-10Ifyes,howhasRISPinterventionchangedyourassociationwithpreviousNGOs?Table-11DoyoufeelyourassociationwiththeFPOhasgivenyouthefollowing?Table-12AwarenessthatFPOssellstheproducewithabrandnameTable-13LowercostsofaccessingcreditTable-14Duetotheintervention,isiteasytoobtaincreditforFPOTable-15Doyouhaveafairaccesstocustomizedfinanceandinsurance?Table-16Perceptionoftheofficebearersregardingthefollowing(N=22)Table-17IiIInputcostPerandPostintervention

ListofFiguresFigure-1Manageagriculturalloss(%)Figure-2ChangeinassociationwithFPO/SPVaftertrainingFigure-3AwarenessamongfarmersabouttheproducesoldinmarketindifferentgradesFigure-4PostInterventionChangesFigure-5Brandingwillhelpfarmer'sproducegainhigherincomeFigure-6AwarenessofRiskmanagementtoolsandstrategies(%)Figure-7PerceptionRiskandLivelihood(%)Figure-8PerceptiononInstitutionbuilding(%)Figure-9PerceptiononMarketLinkages(%)

ListofAbbreviations

GDP GrossDomesticProduct

PMFBY PradhanMantriFasalBimaYojana

SDG SustainableDevelopmentGoals

IRM IntegratedRiskManagement

FPO FarmerProducerOrganizations

GIZ DeutscheGesellschaftfürInternationaleZusammenarbeit

DFS DepartmentofFinancialServices

RISP RuralInsuranceServicesProgramme

AICI AgricultureInsuranceCompanyofIndia

NABARD NationalBankforAgricultureandRuralDevelopment

IRDA InsuranceRegulatoryandDevelopmentAuthority

FMAE Farmer-OrientedMulti-StakeholderAgribusinessEnterprises

SANG SustainableAgricultureNetworkGujarat

DISHA DedicatedInitiativeforSustainable&HolisticAgriculture

SSKK ShikshananeSamajKalyanKendra

VRTI VivekanandResearch&TrainingInstitute

FDC FarmerDevelopmentCentre

PRODUCE ProducersOrganizationDevelopmentandUpliftmentCorpus

NPM Non-PesticideManagement

ExecutiveSummary:

While providing employment and livelihood to a larger share of population, agriculture in Indiaremains one of the most vulnerable economic activities. In past, while there have been someimprovements in agricultural productivity, repeated efforts to improve farm income has failedowingtotheinstitutionalandmarketfailures.Inrecentyears,agriculturaloutputpriceshavebeensusceptibletoglobalmarket,asseenincaseofBTcottonandrice.Emergentclimatechangeeffects,asevidentinrisingtemperature,sealevelrise,depletinggroundwatertables,outbreakofpests,anderraticmonsoon (delayed and unseasonal shower), have further added to the agricultural risks,especiallyaffectingagriculturalproductivity. Inaddition,the instancesofextremeweathereventslikedrought,floodandcyclonehavealsoincreasedinrecentyears.

Inthisbackdrop,howgovernmentsmanagetheseagriculturalriskswillbecriticalfornationalfoodsecurityandlivelihoodofmorethanhalfofthepopulationdependentonagricultureforlivelihood.Recognising the importanceofagricultural riskmanagement, thegovernmenthas timeandagaincomeupwithcrop insuranceschemes,withtherecentculmination inPradhanMantriFasalBimaYojana.Thisscheme,anditspredecessors,tendstofocusononeaspectoftheagriculturalrisks,i.e.crop failure due to bad weather. However, given the local context for agriculture in India, it isimportant to have a holistic approach to agricultural risks and plan for an integrated riskmanagementstrategy.

The GIZ-RISP initiative seeks to fill the gap with a strategy for integrated risk management inagriculture, with pilot initiatives in three Indian states. At this pilot stage, the initiative wasimplemented in Gujarat, Maharashtra and Telengana, covering selected horticulture farmers. In2014, GIZ initiated the Rural Insurance Service Programme (RISP) with cooperation fromDepartmentofFinancialServices,MinistryofFinance.GIZhaspreviouslybeeninvolvedinsimilarinitiatives in other parts of the world. Some of its most influential projects concerning cropinsuranceagainstclimaterelatedcalamitieshavebeenimplementedalongwiththerespectivelocalgovernments’support inGhana,Peru,andPhilippines.ThemainobjectiveofRISPwastoprovideeconomicsecuritytosmallscalefarmersintheformoffinancialproductsandrelatedservices.Theprogrammewasbuiltofthreecomponentswithindependentlyactingpartnersandobjectives,viz.i)cropinsurancecomponent;ii)integratedriskmanagementcomponent;andiii)microinsurancecomponent.IntegratedRiskManagementreferstotheestablishmentoforganizedandwell-plannedstructure for handling the possibilities of an uncertain future. Risk management in agriculturerangesfrominformalmechanisms(likeavoidanceofhighlyriskycrops,diversificationofcropsandincomesources)toformalmechanisms(likeagricultureinsurance,minimumsupportpricesystemandfuturemarkets).Theseservicesandsupportswereprovidedtoselectedhorticulturefarmers,growingmango,pomegranatevegetablesandgroundnut,inGujarat,MaharashtraandTelengana.

AnalysingtheexperiencesinthreeIndianstates,theevaluationstudyfindshigherawarenessandsupport to integrated risk management among the beneficiary farmers. Building on a survey ofbeneficiariesoftheGIZ-RISP,thestudyclaimsthatGIZanditspartnerorganisationsintheinitiative

havedonereallywellintermsofcreatingawarenessondifferentaspectsofagriculturalrisksandwaystomitigatethemamongthefarmers.Thestudyfoundthatfarmersintheinterventionregionshas significantly changed their faming and marketing method which has lower input cost andincreasedtheshareintheprofit.Thesupportingorganisationsworkingwiththefarmerstoreducetheirinputcostandprovidingthembettertechnicalandbusinesssupport.

Overall analysis of the survey data and stakeholders interview shows that the GIZ-RISPintervention is verymuch relevant for the famers. It is also significant to note thatmost of thefamersfoundtheIRMtrainingusefulforthefutureriskmanagementendeavours.AllofthepartnerorganizationinterviewedmentionedthattheyarewillingtocontinuethisinitiativeinfutureevenwithoutGIZ support.However, sustainabilityof such initiativeswouldbe criticallydependentonexternalsupporttoenablethefarmerstoadoptintegratedriskmanagementandsustainablefarmpractices.Moreover,marketlinkageofthefarmersisacriticalsteptosecureaminimumincomeforthefarmers.