CROP INSURANCE, RISK MANAGEMENT TOOL FOR AGRICULTURE SECTOR OF PAKISTAN & ITS ACCEPTABILITY TO FARMERS: A CASE STUDY

Climate change is adversely affecting developing countries. Their economies are heavily influenced by changing the climate, especially countries like Pakistan whose economy is mostly driven by the agriculture sector. Pakistan, which is prone to frequent floods, droughts and exposed to vagaries of climate change and is the 7th most affected country by it, desperately needed a risk management tool to mitigate the impact and to compensate those affected by it. Crop Insurance is one of the most effective tools for the highly risky agriculture sector. Crop insurance based on Area Yield Index is a bestsuited product when it comes to providing yield loss coverage to the farming community. This case study is an effort to analyze the impact and importance of crop insurance which has recently been introduced by the Government of Punjab-Pakistan to support farmers against the impacts of climate change. For Area Yield Index, time-series yield data for several main crops are readily available with the Agriculture Department Punjab. This study has also explored the importance of different marketing strategies that made crop insurance acceptable to farmers