Crop insurance can shield Bangladesh's farmers from climate losses, expert writes

On 11 December 2025, Jagonews24 published an article in its agriculture and nature section by Samiran Biswas, whom the paper describes as an agriculture and environment expert, arguing that crop insurance can stand beside Bangladesh's farmers as climate change makes their harvests less certain. He set out how a warming climate damages crops, why those losses turn into financial shocks for farm households, and how index-based insurance that draws on weather stations, satellites and data models can pay farmers quickly. This report presents his argument and places it beside what government bodies, development lenders and earlier news reports had said about crop insurance in Bangladesh up to that date.

Biswas wrote that climate change is rapidly altering temperature, rainfall patterns, humidity, the intensity of cyclones and the length of droughts. Scientific research shows, he noted, that rising concentrations of carbon dioxide, methane and nitrous oxide in the atmosphere are accelerating global warming, with a direct effect on farming. Abnormal swings in temperature, untimely rain, long droughts, flash floods, rising salinity and changes in the life cycles of insect pests, he wrote, are seriously damaging crop production in a farm-dependent country such as Bangladesh.

According to Biswas, about 70 percent of the farmers in Bangladesh's agriculture sector live with climate-related risk. From rice, wheat and maize to leafy and other vegetables and fruit, he wrote, uncertain weather is cutting productivity in every branch of cultivation. He cited the Intergovernmental Panel on Climate Change (IPCC) as saying that the farming regions of South Asia are among the most vulnerable to climate change, especially Bangladesh, where agriculture is the main pillar of the country's food security. Scientific analysis shows, he added, that over the past few decades the rise in average global temperature has come with more extreme weather events: heavy rain, flash floods, prolonged drought, the spread of salinity, and cyclones that are more frequent and more intense. The pace at which climate change is affecting the world's farm production, he wrote, is a matter of deep concern for agricultural scientists.

The IPCC's Working Group II report on impacts, adaptation and vulnerability, published in 2022, lists South Asia among the global hotspots of high human vulnerability to climatic hazards. Its summary for policymakers says vulnerability is higher where livelihoods depend on the climate, naming smallholder farmers, pastoralists and fishing communities. The same summary says climate change will increasingly put pressure on food production and access, and that more frequent, intense and severe droughts, floods and heatwaves, together with continued sea-level rise, will increase risks to food security in vulnerable regions. At 2 degrees Celsius of global warming or more in the mid-term, it says, those risks will be more severe, leading to malnutrition and micronutrient deficiencies concentrated in Sub-Saharan Africa, South Asia, Central and South America and small islands. It also warns that warming will progressively weaken soil health and ecosystem services such as pollination and increase the pressure from pests and diseases.

The World Bank put figures to the risk in its Country Climate and Development Report for Bangladesh, whose key highlights the bank published on 31 October 2022. By 2050, it said, one third of agricultural GDP may be lost to climate variability and extreme events, a figure it called devastating because agriculture represents around half of employment in the country. Average tropical cyclones cost Bangladesh about 1 billion US dollars a year, and in a severe flood GDP could fall by as much as 9 percent. The report projected that 13.3 million people may become internal migrants over the next 30 years because of climate impacts on agriculture, water scarcity and rising sea levels. It also credited Bangladesh with cutting cyclone-related deaths 100-fold since 1970 and named crop diversification and climate-smart technology as keys to higher farm productivity, better climate resilience and higher rural incomes.

Biswas explained that climate change acts directly on the physiological processes of crops. When temperatures rise, a plant's stomatal conductance, the ease with which gases pass through the tiny pores of its leaves, falls, and photosynthesis declines with it. Drought, or a fall in soil moisture, reduces the working capacity of the roots and disrupts the uptake of nutrients; as the soil dries, photosynthesis is hampered and the crop withers. Heavy rain and waterlogging, on the other hand, cut off the supply of oxygen to the roots, raising the risk of root rot and lower yields. He gave the example of rice: when heavy rain leaves water standing in a field, the flow of oxygen to the rice roots falls and the yield drops. High humidity, he added, helps fungal diseases spread quickly. Together, he wrote, these changes cause significant losses of production in the field.

He singled out heat during pollination. When high temperatures disrupt pollination, the grains in the panicles of rice and the ears of wheat do not fill properly, a condition scientists call heat stress. Rice research has long pointed to flowering as the most sensitive moment. An experiment in the phytotron, a controlled-climate facility, of the International Rice Research Institute (IRRI), reported in the Japanese research journal JARQ in 1977, exposed flowering rice plants to 35, 38 and 41 degrees Celsius. It found that sterility was induced by high temperature on the day a spikelet flowered, while high temperature on the days before or after flowering had little influence on fertilisation; spikelets that flowered during the hot treatment had very low fertility.

For Biswas, the main challenge for Bangladeshi farmers is that these physical losses turn into financial shocks. Citing national statistics, he wrote that floods, cyclones, hailstorms or drought can cost many farmers 50 to 100 percent of their seasonal investment. Smart farming technology, weather forecasts and climate-resilient varieties give some protection, he argued, but they are not enough for a farmer's financial survival. That is why, in his view, scientifically designed crop insurance is now regarded as the most effective strategy for managing farm risk, one that allows risk to be judged and compensation to be paid on the basis of scientific data.

Figures from the year before the article show how large such shocks can be. At a meeting at the Ministry of Agriculture reported by the news agency UNB on 14 September 2024, officials said that crops in 23 districts had been damaged by the sudden floods that began on 16 August 2024. A total of 372,733 hectares of land had been submerged and 208,573 hectares of farmland affected. The estimated loss of crop production was 714,514 tonnes, worth about Tk 3,346 crore, and 1,414,089 farmers were affected; in those 23 districts, 14.58 percent of the cultivated crops were destroyed. Feni was the worst hit, with 35,673 hectares, or 80 percent of its cropland, affected. The other worst-hit districts were Noakhali (38,456 hectares, 37 percent), Cumilla (49,608 hectares, 36 percent), Lakshmipur (15,626 hectares, 33 percent), Chattogram (23,992 hectares, 16 percent), Moulvibazar (15,222 hectares, 12 percent) and Brahmanbaria (8,326 hectares, 35 percent).

Without insurance, such losses fall on the household. After Cyclone Sitrang in October 2022, the Bengali edition of The Daily Star reported on 28 October 2022 that a vegetable and papaya grower in Dumuria upazila of Khulna feared losses of about Tk 5 lakh and a fish and shrimp farmer in Rupsa upazila about Tk 6 lakh, and that thousands of affected farmers like them had been left helpless because there was no agricultural insurance. The paper cited the World Bank's 'Bangladesh Agriculture Insurance Situation Analysis', published in 2018, as putting the average annual loss from natural disasters in the country at about 300 million US dollars.

Crop insurance, as The Daily Star described it in May 2018, is an insurance package designed to protect farmers from crop losses caused by natural disasters such as hail, drought and floods. In a traditional policy, the insurer assesses each farmer's damage after the event. Biswas described crop insurance from a scientific point of view as a statistical model based on measuring farm risk and assessing losses.

In weather-index-based crop insurance, he explained, weather risks are converted into measurable indices, such as a rainfall index, a temperature index or a flood index, and compensation is set by those indices. Payment is made automatically when a set condition is met: when rainfall falls below a fixed level or temperature rises above a fixed limit, or in cases of excessive rain, prolonged drought, spreading salinity or very dense fog. Because no one has to verify each farmer's loss in the field, he wrote, the method removes the complications of loss assessment and gets financial help into farmers' hands quickly. Index-based insurance is rapidly gaining popularity around the world, he noted, and the model is being used on a trial basis in Bangladesh, which he expected would in future secure the finances of farmers on a larger scale.

The Daily Star's 2018 report described the same mechanism in the Bangladesh pilot: a farmer can claim compensation when certain climatic trigger points are hit, such as a cyclone or tropical storm reaching a specified magnitude in a given area, or rainfall rising above or falling below a certain level. Such cover, the ADB said, gives farmers the ability to keep planning and saving for the longer term even if bad weather suddenly destroys their harvest.

Specialists who worked on such schemes in Bangladesh have also described their limits. Writing in The Financial Express on 30 August 2019 after a field visit to Rajshahi, a principal financial sector specialist of the Asian Development Bank (ADB) said that index-based products work well for general events that can be independently verified and measured, such as rainfall, but offer little protection against localised events such as a hailstorm, and may not capture some events that affect a whole area, such as a disease outbreak. He recommended that a blend of indemnity and index-based products be offered, and that farmers be involved in designing the packages so that they match the risks the farmers themselves perceive.

According to Biswas, crop losses are now measured with satellite observation, data from weather stations, soil-moisture sensors based on the Internet of Things (IoT), the vegetation index known as NDVI, yield forecasting models and machine-learning algorithms. These tools estimate a crop's growth, its stress level, its moisture and its likely output with high accuracy, he wrote, so that the extent of damage can be assessed transparently, quickly and scientifically. Sensor-based modern weather observation, satellite data, remote sensing and IoT technology, he added, are making index insurance ever more precise.

NDVI stands for Normalized Difference Vegetation Index. NASA's Earth Observatory explains that the chlorophyll in plant leaves strongly absorbs visible light, which the plant uses for photosynthesis, while the cell structure of leaves strongly reflects near-infrared light. By comparing the visible and near-infrared light reflected from the land, scientists measure the density of green vegetation and can map where plants are thriving and where they are under stress, for example from lack of water. Very low NDVI values, 0.1 and below, correspond to barren rock, sand or snow; moderate values of 0.2 to 0.3 to shrub and grassland; and high values of 0.6 to 0.8 to temperate and tropical rainforests.

Weather data are the foundation of an index policy. For the ADB-supported pilot in Bangladesh, The Daily Star reported in May 2018, a new weather index was generated in conjunction with the Bangladesh Meteorological Department using weather data for the past 25 to 30 years, and some 20 automated weather observation machines were installed on the roofs of upazila parishad buildings. The ADB specialist wrote in 2019 that the pilot's parametric weather indices used climate information generated by the Bangladesh Meteorological Department to decide the trigger points for payout, that automatic weather stations helped to activate timely claims after a disaster, and that a tie-up with the mobile financial service bKash made the collection of premiums and the payment of claims efficient and transparent.

Crop insurance in Bangladesh has a long but thin history. Banglapedia, the national encyclopedia, records that Sadharan Bima Corporation (SBC), the state-owned general insurer established on 14 May 1973, extends unconventional schemes such as crop insurance and cattle insurance, and that crop insurance was available only from SBC. A situation analysis by the World Bank's Disaster Risk Financing and Insurance Program noted that several decades earlier SBC had piloted small crop, livestock and aquaculture insurance programmes, which were terminated after poor underwriting results. The same analysis described a fully subsidised flood index insurance pilot run by Oxfam in selected villages of Sirajganj district, which paid claims to over 700 households in 2014 after severe floods in August and September that year.

The best-known recent effort was SBC's Weather Index-based Crop Insurance (WIBCI) project, supported by the ADB. SBC's project page, last updated on 3 May 2017, described its aim as developing and implementing weather index-based crop insurance as an adaptation tool to reduce the vulnerability of the farm sector, especially small farm households, to climate variability and extreme weather such as flood, drought, cyclone, storm surge and salinity intrusion. Its planned work included pilot testing farmer-friendly contracts in at least three districts, regulatory guidelines for index insurance, upgrading at least 20 weather stations, insurance literacy and climate risk awareness for at least 6,000 farmers, and training at least 300 staff of insurers and distribution partners.

The pilot began in March 2014 in three districts, drought-prone Rajshahi, flood-prone Sirajganj and cyclone-prone Noakhali, with a 2 million US dollar ADB grant, The Daily Star reported on 13 May 2018. According to a presentation at a seminar organised by SBC, 12,000 small farmers came under cover against a target of 6,000; SBC collected Tk 51.36 lakh in premiums, of which Tk 21.97 lakh was a subsidy from the ADB and the government, and claims of Tk 53.46 lakh had been settled. At that seminar, the ADB's country director said the agriculture insurance market was underdeveloped and urged the government to enact a policy to help it mature, recommending insurance tagged to farm credit. The chairman of the Insurance Development and Regulatory Authority (IDRA) observed that crop insurance was popular in neighbouring India but had yet to be introduced in Bangladesh. In his 2019 article, the ADB specialist put the number insured through SBC at over 9,500 small farmers, with premiums shared 50:25:25 among the farmers, the government and the project financier; farmers told him that without the subsidies the premium would be unaffordable.

Private insurers and development partners ran other pilots. On 3 November 2019, Dhaka Times reported that Green Delta Insurance had paid Tk 1.64 lakh in Aman rice claims to 675 farmers in Sherpur upazila of Bogura under the Surokkha project, which the Syngenta Foundation for Sustainable Agriculture and the Swiss Agency for Development and Cooperation (SDC) had funded since 2018. The Daily Star's Bengali edition reported in October 2022 that a weather-index crop insurance pilot had been running since 2021 under the Bangladesh Microinsurance Market Development project, with BRAC and the Syngenta Foundation as partners and SDC support, under which SBC and Green Delta issued policies. BRAC had insured 966 farmers when the scheme started in 2021 and 1,093 in 2022, and had settled many claims from Boro rice and potato growers. A Green Delta official told the paper the company had supported 6 lakh farmers since 2015 and had settled claims of about Tk 8 crore for more than 1 lakh farmers that year, but had no policy for cyclone damage to crops for lack of loss data. The same report said that, apart from such trial schemes, no insurance scheme had yet been launched for farmers.

There were also plans for the haor wetlands of the north-east. Samakal reported on 26 April 2019 that the government intended to introduce crop insurance on a trial basis in seven haor districts, Sunamganj, Sylhet, Habiganj, Moulvibazar, Netrokona, Kishoreganj and Brahmanbaria, through an SBC project in which farmers would pay a nominal premium and the government the rest, with insurance to be taken out as a condition of farm loans. SBC's proposal noted that the seven districts hold 19 lakh 37 thousand hectares of farmland and 373 haors, with Boro rice grown on 90 percent of the farmland, and that early floods had badly damaged the Boro crop in 2017, as they had in 2004, 2010 and 2013.

When Biswas wrote, crop insurance in Bangladesh was still debated rather than in wide use. On 12 August 2025, announcing the new agricultural and rural credit policy, the governor of Bangladesh Bank told a press conference that he was not very enthusiastic about agricultural insurance because the country's mainstream insurance itself was not working. bdnews24.com quoted him as saying that agricultural insurance is risky, that he did not think domestic insurers would ever have the capability to manage it, and that he did not see the possibility within the next ten years, though they would be welcome if they could. Given the insurers' skills, the uncertainty involved and the capacity needed to pay premiums, he said, it would not be financially profitable at that stage, so thinking about it would not be very realistic, though he wanted it to happen.

At the same press conference Bangladesh Bank set a target of Tk 39,000 crore in agricultural and rural credit for the 2025-26 fiscal year, up 2.63 percent from Tk 38,000 crore the year before, with Tk 13,880 crore to be disbursed by state-owned and specialised banks and Tk 25,120 crore by private and foreign banks. Linking insurance to such credit is what the ADB had recommended in 2018 and 2019: its specialist wrote that bundling agricultural insurance with farm credit and farm inputs would protect farmers in the event of crop failure and help restore a farmer's eligibility for credit the following season.

Biswas argued that as climate uncertainty grows, crop insurance does more than compensate for losses. It supports farmers' ability to reinvest, their creditworthiness and the stability of the rural economy, he wrote, and it encourages them to adopt climate-resilient technology, easing the way to sustainable farm development over the long term. Beyond making farming safer, he wrote, it plays an important part in food security, sustainable production and climate-resilient agriculture. In his view, crop insurance is one of the strongest institutional supports of the future farming system for building reliable financial security for farmers against the strain of climate change, and an evidence-based way of protecting not only farmers' crops but the country's food security, farm economy and overall development.

International assessments place insurance in the same toolkit. The IPCC's 2022 summary lists risk spreading and sharing among adaptation options with broad applicability across sectors, and says such options give greater benefits when combined with others, such as disaster risk management, early warning systems and climate services. Among the public and private finance instruments for adaptation it names household savings and insurance, and it says public mechanisms can draw in private finance, for example through public-private partnerships.

The farmers who took part in the Rajshahi pilot gave their own verdict, according to the ADB specialist's 2019 account: crop insurance was not a liability and gave them benefits in unforeseen circumstances, but the insurers needed to pay claims faster. Microfinance institutions that offer crop loans could help build awareness of insurance and deliver it at farmers' doorsteps, he wrote, and seed companies and other players in the value chain could become partners. Farmers, he found, were open to financial technology after paying premiums and cashing out claims through mobile banking.

Photo: Balaram Mahalder / Wikimedia Commons (CC BY-SA 3.0)

Sources: Jagonews24, The Daily Star, The Financial Express, Sadharan Bima Corporation, Banglapedia, World Bank, Intergovernmental Panel on Climate Change (IPCC), UNB, bdnews24.com, Samakal, Dhaka Times, NASA Earth Observatory, JARQ (Japan International Research Center for Agricultural Sciences)