There is a range of reasons for establishing agricultural and climate risk insurance, including adaptation to climate change, food security, disaster risk management or social protection.  

 

Regardless of the motives, however, creating an effective insurance system inevitably cuts across various political spheres. Hence, the first key element is to create a broad consensus amongst policy makers and their commitment to creating an enabling policy environment that fosters the necessary infrastructure. This includes the integration of agricultural and climate insurance into respective national policies, strategies and action plans. 

 

Coordination across government sectors is crucial to avoid contradictory incentives amongst stakeholders: a government can, for example, support agricultural insurance, and yet crowd out insurance solutions through the provision of public social protection programs. Mobilizing public resources and  creating  a suitable regulatory framework are further crucial  policy requirements for setting up effective agricultural and climate risk insurance systems.