Weather Index Insurance of Apple Farming in Jumla

August 18, 2016

Weather related risks has increased the vulnerability of smallholder farmers and has negatively impacted their livelihoods. In this scenario, Weather Index Insurance (WII) can present significant economic efficiency by allowing farmers to put more resources on agriculture. It also helps open doors to avail ranges of other financial services.

Apple farmers are facing weather related risks such as drought and hailstorm which hampered their apple production. Farmer had bad experiences of production volume and quality of apple due to hailstorm. Limited rainfall in April and May also contributes to less production of apples as rainfall is required during its flowering season. Due to climate change, the adverse weather has severely impacted farmer’s productivity. In addition, due to hailstorm, the production volume and quality of apple is degraded.

Sakchyam’s Interventions

In an effort to contribute to WII sector, UKaid Sakchyam – Access to Finance Programme (Sakchyam) collaborated with Shikhar Insurance Company Ltd. to introduce WII of apple farmers of five apple farming districts in mid-western region for the first time in Nepal.

Sakchyam assisted Shikhar Insurance in developing appropriate WII product to minimize the effect of adverse weather in apple farming. Sakchyam and Shikhar conducted feasibility study to understand the need of insurance products for farmers. After analysing historical weather data and production data of apple, appropriate WII product was developed. Hailstorm was also added as an additional rider, as it is not measured via weather index, to address farmer’s risk of hailstorm.

Sakchyam supported Shikhar Insurance to introduce WII product in Jumla, Kalikot, Mugu, Dolpa and Mustang. Shikhar Insurance has started implementing WII in Jumla from 2016 while it has opened three more branches in Kalikot, Mugu and Dolpa to start selling WII in 2017.

WII is gradually gaining momentum. Shikhar was only able to sell the WII product to 41 apple farmers in the first season but expanded the product to 410 apple farmers in second season to reach a total of 451 farmers as of April 15, 2017. Total sum insured of the insured farmers is more than 24 million NPR.

Shikhar is also in the process of expanding WII product in paddy in Kailali and Kanchanpur, with the support of Sakchyam. They are expecting to introduce WII of paddy from this season.


Through its Sakchyam-funded project, Shikhar will serve more than 11,000 clients in different intervention districts.  They will also expand crop and livestock insurance to needy farmers. The product will cater to large sections of disadvantaged and marginalized farmers. This initiative is also expected to be replicated by other insurance companies in relevant crop and geography.

As of June 2019,

  • Issued more than 3,411 Weather Index Insurance & Livestock Insurance policies to apple farmers insuring more than 87,800 apple trees worth more than NPR 241 million.
  • Paid claim worth NPR 11.1 million to 1,376 farmers.

featured product profiles

Commercial Banks in Nepal have been endeavouring to expand their presence in the Small and Medium Enterprise (SME) lending space[1]....(more...)
Till 2017, the irregular and uncertain supply of electricity was a major problem for households and enterprises in Nepal. According...(more...)
After completing two years of the partnership titled ‘Retail Banking and Branchless Banking in Manang, Rukum and Achham’, Prabhu Bank...(more...)
Bringing a financial institution and a sugar mill together to provide financial relief for sugarcane farmers in rural western Nepal(more...)