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Sustainability 2016, 8(12), 1306; doi:10.3390/su8121306

Assessing the Challenges in Successful Implementation and Adoption of Crop Insurance in Thailand

Asian Institute of Technology (AIT), Pathumthani 12120, Thailand
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Academic Editor: Adrian Müller
Received: 6 September 2016 / Revised: 4 November 2016 / Accepted: 5 December 2016 / Published: 13 December 2016
(This article belongs to the Section Sustainable Agriculture, Food and Wildlife)
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Abstract

The purpose of this paper is to assess the gaps in the adoption of crop insurance in Thailand and suggest possible solutions relating to policy support and framework, implementation mechanisms, technology adoption, and awareness amongst farmers. The methodology includes a literature review, interaction with officials, rice experts and insurance experts, and discussion with farmers. A study was undertaken at province level to assess the impact of using rainfall index as a threshold. Additionally, focused group discussions (FGD) were conducted with rice farmers at the village level. Key issues targeted in the FGD were to understand the behavior and practices during droughts, impact of drought on crop yield, methods already in use to reduce the impact, such as plantation of drought-resistant rice, and the adoption of crop insurance. Data availability is a challenge and has led to withdrawal of Weather Index Insurance (WII) in 2015. WII have threshold levels based on historical rainfall. Adoption of coping mechanisms, such as drought-resistant rice and irrigation increases the chances of adverse selection. In absence of ground based weather data, a combination of satellite agriculture drought information can be used to make crop insurance more attractive as it would help in reducing basis risk and improving insurers and farmers’ confidence in the product. Discussion with farmers, insurance companies, and the Bank of Agriculture and Agricultural Cooperatives (BAAC) in Thailand suggested low awareness among farmers about the potential benefits of weather index insurance products. Relatively low compensation is also an obstacle. Proper marketing and awareness raising campaigns should also accompany the introduction of index-based insurance products. View Full-Text
Keywords: crop insurance; coping mechanisms; drought related risk management strategies; drought resistant rice; farmers’ awareness; weather index insurance crop insurance; coping mechanisms; drought related risk management strategies; drought resistant rice; farmers’ awareness; weather index insurance
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Sinha, S.; Tripathi, N.K. Assessing the Challenges in Successful Implementation and Adoption of Crop Insurance in Thailand. Sustainability 2016, 8, 1306.

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