Abstract:
The core objective of this study is to explore the feasibility of
farmers‟ organizations (FOs) as a vehicle for micro-insurance
delivery of the paddy crop, grown by small-scale (peasant)
farmers in Sri Lanka. Factor Analysis was used to elicit the
group dynamic and the capacity of FOs as a stakeholder in the
insurance supply chain. The results show that the farmers‟
organizations are most widespread and are a very close
institutional setup for paddy farmers because FOs are capable of
handling financial activities with transparency, and have healthy
financial habits and as a result farmers participate actively in
farmers‟ organization activities. This study provided clear policy
insights for the policy makers to implement an innovative
business model for micro-insurance delivery to be incorporated
with the FO model in Sri Lanka. Furthermore, it was revealed
that the postal network can act as a financial intermediary in
circumstances to assist the FOs in financial activities, where the
commercial insurers do not have an outlet or branch networks in
their target area. Therefore, in order to develop the links
between the farmers and the insurers, it seems viable that the
public-private partnership model be used for micro-insurance
supply to paddy farmers in Sri Lanka.
