Bangladesh Agricultural and Disaster Insurance Programme (BADIP)
Smallholder farmers in Bangladesh face considerable risks. Droughts, floods, winds, temperature shocks, pests and diseases can destroy their livelihoods and leave them indebted for years. To cope with such shocks, they are often forced to sell productive assets and fall back in poverty. By developing the market for agricultural insurance and related extension services, BADIP will sustainably increase poor farmers’ resilience, giving them the confidence and security to step up their productive investments.
Employment & economic development
Informal banking & insurance
Business support & economic inclusion
- Other Swiss Non-profit Organisation
- Syngenta Foundation
Agriculture has been playing a major role in ensuring broad-based inclusive growth in Bangladesh. 48% of the workforce is dependent on the sector as main income source. Small farms account for 96% of the operational holdings, with a share of 69% of the total cultivated land. Though smallholder farmers are subsistence oriented, in recent years many have started to sell a portion of their products in the market and have become an integral part of agricultural value chains spanning the whole country. Whilst rice remains the main staple crop, maize and increasingly vegetables contribute to the food security and nutrition diversification of the poor. Livestock constitutes an important income source, particularly for landless and women farmers.
The geography of Bangladesh makes the country extremely vulnerable to floods and cyclones, and weather risks are exacerbated by climate change. Due to their limited savings and limited access to social protection, smallholder farmers are disproportionately affected by weather-related damage to crops and livestock diseases. The loss of a season’s crop or of livestock can be catastrophic. To cope with such catastrophic losses, smallholder farmers often have no other choice than to resort to negative coping strategies which affect their health and compromise their future. Such strategies include reducing expenditure on food and education, distress borrowing at high interest to cover consumption needs or selling off productive assets. This will cause the non-poor to fall back into poverty, and for those already poor it can destroy any hope of ever escaping poverty.
Without access to insurance, smallholders’ only available strategy for reducing exposure to such risks is to limit their investment in high-value inputs and diversifying into off-farm activities. Low investment in inputs and services means they cannot lose much in the event of a disaster. It also means that productivity and returns on their investment remain low. These “low investment - low returns” risk reduction strategies condemn smallholders to remain in poverty, or lead a life perpetually on the brink.
The overall goal of Phase 1 of BADIP is to improve the well-being of farmers, specifically the smallholders through enhanced agricultural productivity and resilience to natural disasters. BADIP will achieve this goal by developing relevant crop and livestock insurance products and risk reduction services available and accessible to farmers.
BADIP targets smallholder farmers, particularly women, poor and disadvantaged, as ultimate beneficiaries, with 340’000 farmers benefiting from risk-reducing advisory and veterinary services, crop and livestock insurance by the end of the 1st phase, and 744’000 crop and livestock insurance policies sold over four years. Since insurance policies will be embedded in other products and services already being sold to farmers such as seeds or loans, the choice of the organizations which bridge the last mile and purchase these insurance policies on behalf of farmers (aggregators) will be key. SFSA and PKSF will chose aggregators which have a strong outreach to poor and female farmers and livestock keepers, in order to maximize the share of poor and female beneficiaries. Women will be empowered through financial literacy trainings provided by PKSF microfinance institutions.
Output 1 Farmers have access to qualified veterinarian and extension services.
Output 2 Farmers are aware of the benefits of using crop and livestock insurance.
Output 3 Commercially viable models for crop and livestock insurance are identified and tested.
Output 4 Insurance companies/MFIs adopt appropriate products and business models for crop and livestock insurance.
Output 5 Banking and Financial Institutions Division (BFID), Insurance Development Regulatory Authority (IDRA), Microcredit Regulatory Authority (MRA) and other public agencies are aware of the need for an enabling policy and regulatory framework for crop and livestock insurance.
Results from previous phases:
|Directorate/federal office responsible||
International or foreign NGO
Swiss Non-profit Organisation
Swiss Re (Overarching Strategic PPDP)
|Coordination with other projects and actors||
Currently, different donors are exploring options and opportunities (with both credit and grant) to support the development of insurance sector in Bangladesh, including crop and livestock insurance segments. Five bilateral and multilateral development partners (ADB, JICA, SDC and WB) are currently involved in various insurance sector initiatives. Hence, there is a strong need for donor alignment and coordination. Since the Financial Sector Local Consultative Group (LCG) is not very active in Bangladesh, BADIP will create a platform for the donors to share their experiences and coordinate activities between and among projects.
|Budget||Current phase Swiss budget CHF 9’950’000 Swiss disbursement to date CHF 5’576’354|
|Project phases||Phase 99 01.11.2021 - 31.12.2028 (Active) Phase 1 15.05.2016 - 31.12.2022 (Current phase)|