Transforming risk into resilience: a review of insurance strategies for sustainable shrimp aquaculture in India and beyond

Abstract

Shrimp is a key commodity constituting one-third of the global annual seafood trade of USD 171 billion (2024) constituting for approximately 25% of the agricultural trade. Farmed shrimp contributes significantly to foreign exchange earning in major producer countries. The sector faces biological, climatic, and market risks, including viral pathogens like White Spot Syndrome Virus (WSSV), microsporidian infections such as Enterocytozoon hepatopenaei (EHP), cyclones, floods, and global price volatility. Insurance is one of the major de-risking tools providing financial protection to farmers. Inherent vulnerability to risks of the aquaculture limits the interest of the insurers to offer cover to the shrimp farming. Aquaculture crop insurance is a crucial mechanism for achieving several Sustainable Development Goals (SDGs), particularly those focused on poverty reduction (SDG 1), food security (SDG 2), and climate action (SDG 13). By safeguarding farmers against losses from events like natural disasters and crop diseases. It promotes income stability, encourages the adoption of sustainable farming practices, and enhances agricultural productivity, ultimately building the resilience of coastal rural poor communities against the impacts of climate change. This review synthesizes global experiences with indemnity and parametric insurance models, evaluates challenges and adoption rates across countries, and presents a detailed case study of India. Further, it explores different insurance policy models and highlights the role of regulatory agencies. The study discussed modern scientific measures like, Better Management Practices (BMPs) and application of digital technologies; Artificial Intelligence (AI), Internet of Things (IoT) and satellite imaging in reducing the risk and efficient loss assessment for swift claim settlement. Recent ongoing efforts to revitalize Indian shrimp crop insurance products through institutional and industry linkage with enhanced participation of farmers and other stakeholders are highlighted. This review advocates policy alternatives and other options available such as, insurance linked credit flow, government supported re-insurance, group insurance and affinity insurance for sustainable aquaculture insurance. Challenges include low awareness, limited parametric adoption, and historical disease outbreaks. Key lessons emphasize government support, premium subsidies, digital monitoring systems, and coordinated stakeholder partnerships. The findings provide actionable guidance for policymakers, insurers, and other stakeholders on designing effective, inclusive, and sustainable shrimp aquaculture insurance frameworks globally. Recommendations focus on subsidized premiums, streamlined claims processes, and farmer education programs.