Prospects of Crop Insurance as a Risk management tool among the Banana Farmers of Kanchanpur District, Nepal

— Out of 60 household literacy percentage of study area was found to be 80% which is above the national average. Major occupation of sampled household was agriculture (63.33%) which is nearly equal to the national scenario. Nearly 50% of total land was covered by banana cultivation. Between selected site of study, Punarbas municipal farmers were more likely to adopt insurance than Krishnapur municipal. Almost all insured farmer were aware about insurance before adopting crop insurance but only 3/4th of non insured farmer were aware about insurance and government policy related to insurance. Insured farmer motivation towards adoption of insurance was due to awareness provided by the insurance company and capacity to paying premium while some farmers were reluctant to adopt insurance due to untimely payment of claim and no faith in insurance company. The 80% of total insured farmers were reimbursed after bearing loss. While taking about continuity insurance if the government reduce the subsidy scheme, more than 90% insured farmers were willing to continue crop insurance but less than 1/4th of insured farmers were ready to continue insurance after complete withdrawal of subsidy scheme. About 60% of banana farmers will read to pay 3% premium rate if the government reduce the subsidy or without subsidy support. Adoption of insurance (100%) and price setting before harvesting (56.67%) were the main strategy to recover the loss by insurer farmers whereas crop diversification, crop management practices and price setting before harvest were the main strategy to minimize the loss by the non insurer farmers.


I. INTRODUCTION
Agriculture continues to be extremely important business which contributes more than 60% to the total national export (CBS, 2014). The Nepalese agriculture sector is based on the production of basic staple food grains. Very few farmers, who have stepped towards the HVC and other commercial crops, are not confident about the future because of the lack of credit, appropriate infrastructure and weather vagaries. Among the harvests of business significance, banana is a standout amongst the most critical natural product usually developed in sub-tropical and tropical part of the country. It is being developed since time immemorial in home yards for home utilization in Nepal (Gautam & Dhakal, 1994). Banana positioned third in production and fifth in territory among fruit crops in Nepal (CBS, 2014). Banana has great potential for income generation, enterprise development and job creation for the people.
Agriculture is directly exposed to the natural climate and weather. Banana having a weak fleshy pseudo stem and more weight at the top of plant is more prone to weather problems. Banana farmers in Nepal are facing many risks in their farming activities, the major being the windstorm. Banana farmers in Nepal are facing many risks in their farming activities, the major being the windstorm. The frequency of recurring windstorm is creating fear, anxiety and loss of production in banana farmers. To solve the issue to some extent National crop insurance directive was promulgated in 2013, but it's appropriate implementation and regulation has not been practiced intensively till date. The indigenous coping strategies such as crop diversification, irrigation maintenance and off-farm International Journal of Environment, Agriculture and Biotechnology, 5 (5) Sep-Oct, 2020 | Available: https://ijeab.com/ ISSN: 2456-1878 https://dx.doi.org/10.22161/ijeab.55.13 1281 strategies are not found effective anymore in this changed scenario. Due to low level of participation of farmers in the crop insurance, the future of this scheme is totally uncertain and no one is in the stage to say it by now.
In these situations this research helps to identify the perception of farmers toward crop insurance particularly in banana and determine their willingness to join and pay for it identifying the principle factors affecting the adoption of insurance schemes and would be helpful in policy recommendations to increase the farmers' participation in crop insurance schemes in near future.
There is great need to work in this sector and develop the future road map of the insurance scheme and banana farmers in Nepal. This research tries to identify the motivational factors for the farmers to adopt banana insurance.
Till today no any study has been carried out to drag the actual cause behind low level of participation and the factors influencing the decision for crop insurance. In this aspect crop insurance becomes most essential in our contest. To solve the issue to some extent National crop insurance directive was promulgated in 2013, but it's appropriate implementation and regulation has not been practiced intensively till date.
The National crop insurance policy also doesn't have much research base to proceed further effectively. To reduce this gap research is designed to achieve the following specific objectives; identify the risk involved in banana production in Nepalese context; evaluate the most important factors that influence farmer's decision for crop insurance and willingness to pay as crop insurance premium; assessing farmer's perception on crop insurance; assess farmer's willingness to adopt crop insurance as a risk management tool. This research would be quite helpful in policy recommendations to increase the farmers' participation in crop insurance schemes in near future.

Study area
The study was conducted in Kanchanpur districts of far western of Nepal as it is one of the main banana producing districts. Punarbas and Krishnapur Municipality were purposively selected for the study with the consultation of the community level and district level organizations. These settlements are occupied by Brahmin, Chhetri, Dalit, Tharu, Janajati & others.
Kanchanpur District in the Mahakali Zone is Nepal's most western district in the Terai and shares its southern and western borders with India. The latitude and longitude of the region is 280 32″-290 8″ and 800 3″-800 33″ respectively. The maximum & minimum temperature of this area is 30.50 0C and 17.50 0C respectively and the annual rainfall is 1422.71 ml. The headquarters of this district is Mahendranagar, covers an area of 1610 km2 and has a population of 451,248 according to census 2011. The predominant language of this area is Nepali, Tharu, Rana Tharu, Doteli and Tamang.

Sampling size, sampling procedure and selection of the respondent
All the farmers from these two settlements were the target population for this study. During the selection of the respondents, only age of above 30 years and at least 15 years of settlements within locales were included in the sample, with the hope to make available of the valuable and useful information regarding the past trends of crop insurance in banana. Careful attention was paid to make the sample more inclusive. All together 60 households (30 insured & 30 non-insured) were selected purposively for the study from both Municipality.

Research instrument
Research instrument includes the semi-structured questionnaire which was pre-tested to nullify the errors present in the questionnaire. The research period lasts from 3rd march-15th of April 2017. the housleholds selected for pre-testing were not selected during survey. Key informant interview was conducted and one focus group discussion to triangulate the information collected and also to aware farmers about the pros and cons of insurance and further recommendations and strategy.

Data collection
Both the primary and secondary informations were collected. Primary information was collected from the field survey and secondary informations were collected from the past literetures and most relavant study. For the collection of secondary information national and intersnational journal articles were used, ministry reports, websites and various national conferences papers were traced.

Data analysis
Both the descriptive and inferential statistics were used for analyzing data. Data analysis was done by using Ms-excel 2010 and IBM SPSS V.16. ranking was done by using the index of importance. This indexing technique was used to calculate the constraints associated with potato production in the Terai region ( (2017) All Insurers farmers were awared about the insurance and insurance subsidy scheme before adoption of crop insurance which was provided by government. More than 2/4th of noninsurers farmers 76.67 percent (23 out of 30) were awared about both of the scheme even they do not adopt insurance (Table 3).  (2017) The source of information on insurance scheme by insurer farmers was Insurance Company i.e. 50 percent then followed by Co-operatives and I/NGOs (26.67%), and DADO (23.33%). No any farmers among insurers do not get information from media (  Among the major hindrances for not adopting crop insurance by the farmers; not timely payment of the claim ranked first followed by lack of faith in insurance company then Documentation difficulty, awareness of insurance, access of insurance companies and capacity of paying premium ranked lastly. The ranking scale for reason for no adoption of insurance by non-insurer farmers is ranges from 1 to 4 in which 1 denotes the higher ranking and 4 denotes lower ranking for no adoption of insurance (Table 5). In case of non-insurer farmers if the index value is high then it's ranking as first but it is reverse in case of insurer farmers. Similarly as in non-insurer farmers the ranking scale ranges from 1 to 4 but if the index value is lower it prioritize as ranking first and for higher value of index it is ranked as last. Here in the above table 6, among the major motivational factors towards insurance by the farmers; Awareness of Insurance ranked first followed by capacity of paying premium, faith in insurance company, access of insurance companies, timely payment of claim and documentation ranked last. Insured farmers have to good access to pay for the premium needed to pay after premium and were also found to pay more than 75% average (Budhathoki et al., 2019).  If the government reduce the subsidy provided to farmers for insurance, maximum number of farmers about 28 (93.33%) out of 30 were ready to adopt insurance and only 2 (6.67%) were discontinue the insurance. But if the government completely withdrawl the subsidy provision almost 76.67 percent of farmers were discontinue the insurance and only 23.33 percent farmers were ready to continue insurance ( Table 7). The main reason regarding discontinuation of insurance is due to the insufficient amount of subsidy and even unfair policy regarding the payment for damaged crop and area. The 40 percent insurer farmers were ready to pay maximum extent rate at the rate 1% more if the government reduce the subsidy or without subsidy support and about 60 percent insurer farmers were ready to pay 3% more premium rate with reduce subsidy or without subsidy support (fig 2). Similar to our findings was reported by (Pant et al., 2019). To recover the crop losses multiple activities were found which was done by the farmers adopting insurance and not adopting insurance. For recover the loss from banana farming, farmers adopt insurance (100%), Price setting before harvest ranked first (56.67%) followed by Crop diversification (36.67%), crop management practice (26.67%), and change the variety (6.67%) ranked as last ( Table 8). The amount of premium paid for the insurance of crops was determined by the nature of crop (Budhathoki et al., 2019) and even in some conditions change of firm under losses was adopted.

Stage of Insurance in banana
Most of the farmers insured the banana at early stage of growing and few numbers of farmers insured the banana before fruiting. The damaging stage of banana crops is before fruiting, early stage of fruiting and during harvesting. So farmers should insure their banana in early stage of growing.

Basis for Evaluation
Evaluation should be carried out by plant per hectare basis and premium per hectare basis. The amount of premium paid by banana farmers was higher than that of reported by (Budhathoki et al., 2019), this might be due to the premium payment under different crops. Basis on evaluation 5% premium should be paid, out total premium paid 75% premium was paid by government and only 25% premium was paid by the banana insurer farmers. The premium rate per plant was calculated by following ways: Premium paid = Premium rate per plant * plant per hectare = 2.5*2700 = Rs. 6075 Frequent re-evaluation will also be conducted by insurance company or agent.  The valuation should be done on the field during destruction and percentage of reimbursement of claim should also announced at that time.
➢ If increase in premium rate, there should be provision of full payment on time.
➢ The loss percentage should be fully recovered.
➢ Made easy assessment of claim settlement.
➢ Timely and easy access of documentation and service delivery.
➢ No need to increase the government subsidy but made the claim procedure easy, timely provision of payment, full recovery of loss, etc.

Reason for not going other crops and livestock insurance
➢ Not done in a commercial way.
➢ No assess of insurance company.
➢ Less chance of losses than banana crops.
➢ Lack of awareness.
➢ Lack of premium paying capacity.
➢ No faith in the scheme/agency.

Benefits of having Insurance agent in the community
➢ Easy in Documentation.
➢ Timely provision of reimbursement of the claim for the crop losses.
➢ Easy in claim payment.
➢ Easy in premium payment.
➢ Easy in claim procedure and valuation.
3.3.19 Difficulties of not having Insurance agent in the community ➢ Take long time for loss settlement.
➢ Difficulty in claim procedure.
➢ Low assess of insurance service provider to the farmer's field.
➢ Difficulty in documentation.
➢ Difficulty in searching the insurance agent.
➢ Loss of claim payment due to unavailability of insurance agent during destruction.
➢ Difficulty in valuation process.

Condition for insuring banana crop
➢ If easy access of claim procedure.
➢ If timely reimbursement of claim.
➢ If valuation method made easy.
➢ If easy in documentation.
➢ If easy access of Insurance agent, DADO agent.
➢ If provision of full payment of claim according to losses.
➢ If claim payment is sure and easy in claiming.
➢ If easy access of government subsidy during loss condition.

Suggestions of improving Agricultural insurance
Government should pay full attention on insurance service provider.
➢ Access of insurance agent in their V.D.C.
➢ Provision of losses in time.
Provision of full payment of loss should be given to the farmers.
➢ Documentation process should be made easy.
➢ Direct supervision should be made by Government agency.
➢ Valuation should be done in the field by government agency during loss occurs. ➢ Equally treated to all farmers i.e. no biasness in between farmers.

IV. CONCLUSION
Female household heads were more likely to adopt insurance. Access of source of information as more influences factors for adopting insurance if government provided premium subsidies. Timely payment of claim, faith of Insurance Company and documentation of insurance had negative attitude towards crop insurance among farmers even they incurred loss. Different INGOs and NGOs, Insurance Company should have collaboration with government agency will increase the adoption of crop insurance.