Micro Insurance for Protecting Livelihoods – Perspectives of Livestock Insurance

Abstract

Livestock contribute towards the livelihood of the poor by supporting subsistence consumption at household level. It is an integral part of the livelihood of India’s rural population. As the critical mechanism to cope with crop failure, it helps generate assets and bolsters the financial security of rural Indian farmers, many of whom are among the poorest people in the country. The intensive rearing of livestock led to higher incidences of diseases and involvement of high feed cost due to stall fed system. Raising cattle, sheep or poultry is a risky business – especially if you do not own a herd or flock but only one or a few animals. The biggest risk is disease. Insurance as the key risk transfer must adapt to the coming reality of more commercial farming in India. The Government of India provides insurance against income losses of vulnerable sections arising out of four major reasons such as crop failure, sudden death of family member, unforeseen health expenditure and unexpected death of cattle. This paper intends to identify various schemes and arrangements for the Livestock Insurance in India. It also narrates the financial structure and availability of livestock insurance in Indian context. The last portion narrates the policy recommendations for the development of this sector.