For decades, discussions about agricultural insurance have centred on the individual farmer—how to protect smallholders from crop losses, stabilise incomes, and encourage investment.
Yet in today’s more complex and interconnected risk environment, this narrow focus on farmers is no longer sufficient, say Mr Rodrigo Salcedo Du Bois, a Senior Technical Specialist-Economist with the IFAD Office of Development Effectiveness (ODE) and Ms Carola Alvarez, ODE Managing Director, presenting their views in an article posted on the website of the International Food Policy Research Institute. IFAD stands for the International Fund for Agricultural Development, the Rome-headquartered UN agency exclusively dedicated to eradicating poverty and hunger in developing countries.
The authors say that the policy challenge has broadened: it is no longer enough to ask how farmers can cope with risk. The more pressing question is how entire value chains can remain functional, investable, and inclusive in an increasingly volatile world.
“From this perspective, agricultural insurance is not just a tool for farmers, it is a key mechanism that can help underpin value chain resilience when combined with risk reduction, rural credit and liquidity (such as seasonal and working-capital finance), and structured market arrangements (such as offtake or contract farming agreements),” the article reads.
The writers call for a shift towards value chain-based insurance and risk sharing mechanisms, supported by and aligned with climate finance policies.
Toward a value chain resilience agenda
Below are some key recommendations:
- Treat insurance as core value chain infrastructure—not a niche financial product
Insurance should be embedded in the financial and operational infrastructure of agricultural systems. Insurance should be integrated into how contracts are structured, how finance is delivered, and how partnerships between public, private, and producer organisations are designed.
- Focus public investment on key enablers
A range of public goods has emerged around insurance. Markets alone will not provide these at the required scale. These include: high-quality weather and agronomic data; digital delivery systems such as mobile money platforms; meso-level instruments that ensure that finance and trade keep flowing after shocks; and sound regulation, including specific frameworks for index and microinsurance products, providing the predictability that private insurers and reinsurers need to commit capital.
- Make inclusivity a key priority
Risk management systems should be designed to ensure that smallholders, farm workers, women, and youth are not pushed out of value chains as risks intensify. Women’s exclusion from agricultural insurance is not merely an equity concern—it is a market failure with systemic consequences. Women manage a disproportionate share of smallholder food production, yet are consistently underrepresented as insurance beneficiaries. When they lack access to insurance or other forms of risk transfer, entire segments of value chains remain exposed.
Governments and development partners can address this by channeling products through women’s groups and cooperatives, aligning premium payment schedules with women’s income cycles, and requiring gender-disaggregated data in all publicly supported programmes. M