Agriculture is a key activity in Sri Lanka, but is mainly practiced by poor smallholders who farm very small parcels of land. Plus, farm yields are subject to unstable weather conditions and wide price fluctuations that threaten farmers’ incomes. Under such conditions, crop insurance is seen as essential to safeguarding farmer assets. But, to make it available, there are many challenges to be overcome.

Développement international Desjardins (DID) and its cooperative partner in Sri Lanka, SANASA, have developed an index-based crop insurance product that is both simple and innovative, based on recorded rainfall. This product pays out benefits to rice growers in a systematic manner when there is too little or too much rainfall, thus providing compensation for the losses created by adverse weather conditions. This is one of the various initiatives carried out by DID and its 28 Proxfin-member partners in order to increase financial inclusion around the world.

Dr. Podi Appuhami Kiriwandeniya, Leader of the SANASA Movement, presented this innovation at the International Summit of Cooperatives which took place in Quebec City last October. According to him, index-based crop insurance has three main features:


It is easy to understand and administer


Benefits are predetermined using objective guidelines thus avoiding potential fraud and the costs related to visual assessment of damage

Delivered fast

Benefits are paid out within a month.

Also, being a vast network of member-oriented financial cooperatives, SANASA is a vector for education and delivery which is extremely effective and deeply rooted in the community.

Until now, 6000 rice farmers and their families have enjoyed protection from the index-based crop insurance product offered by SANASA across 12 regions. In the coming seasons, SANASA expects outreach will total more than 10,000 farmers in 25 regions. It is also adapting the product to other agricultural productions.

This project was made possible with financial support from the Canadian International Development Agency (CIDA) and the International Labour Organization (ILO), as well as technical support from Basix, a DID partner and Proxfin member livelihood promotion institution based in India.