Livestock Insurance as a Risk Management Tool in Indian Dairy Sector

Epidemic livestock diseases, climate risk, marketing/sales risk, feed cost variability, Poor conception and delay in treatment/AI emerged as relevant sources of risk to the dairy farmers. The most relevant risk management strategy for the dairy farmers were vaccination of animals, having own agricultural land, having financial reserve, life insurance, livestock insurance and off farm employment. The intensity and domination of risk and risk management tool adopted by dairy farmers varied due to their personal perceptions of risk, socio-economic status of that farmer, farm type and institutional arrangements. It is clear that livestock insurance is an important innovation in India for any number of reasons. The large risks that are present in Indian livestock herding operations make livestock insurance extremely challenging. It is a challenging task to make it an effective instrument to minimize vulnerabilities of livestock farmers, who are not only poor but also have very low risk-bearing ability, thus, insurance could prove to be a useful instrument under the situation.