A complete agro-financial service framework for emerging economies

Purpose – The purpose of this paper is to propose a conceptual framework for a comprehensive agricultural financial service to address the problems faced by the farmers and the insurance companies and to suggest the product delivery method to increase the acquisition rate of the product. Design/methodology/approach - A theoretical framework is proposed based on the pros and cons of various insurance services floated out earlier as well as the various risks faced by the farmers. Subsequently, on the basis of the factors that affect the take up rate of insurance products, the paper proposes an adequate delivery strategy. Findings – An efficient integrated framework for risk management in agriculture has been developed by interlinking various elements like price risk, yield risk and demand risk in addition to providing additional advisory and credit services. Other services only cover one or two of these and hence, are not adequate. Also, illiteracy of farmers is the main bottleneck that decreases the take up rate and can be addressed by appointing agro-financial agents. Practical implications - The frameworks proposed if brought into practice will lead to a holistic agro-financial service and help in overall advancement of the agricultural sector and economy. Originality/value – This paper would help insurance companies to come out with better insurance products for the agricultural community that will be easier to administer and economically more viable and thus fulfils the criteria for a holistic insurance framework.