Weathering The Harvest: Crop Insurance In Agriculture

 Weathering The Harvest: Crop Insurance In Agriculture - Pradhan Mantri Fasal Bima Yojana (PMFBY) was introduced in 2016, replacing all existing crop insurance schemes in India. The scheme has expanded coverage under localized risks, post-harvest losses etc. and aims to adopt technology for yield estimation. The scheme aims to increase access to crop insurance in India through increased farmer awareness and lower farmer premium rates.

The Pradhan Mantri Fasal Bima Yojana (PMFBY) aims to support sustainable production in the agricultural sector –

Weathering The Harvest: Crop Insurance In Agriculture

D) Ensuring credit flow in the agricultural sector; which will contribute to food security, crop diversification and growth and competitiveness

Technology Helps Farmers Weather The Storm (or Drought) Via Crop Insurance

All farmers including sharecroppers and tenant farmers growing notified crops in notified areas are eligible under this scheme.

Borrower Farmers (Mandatory Coverage): All farmers availing Seasonal Agricultural Operation (SAO) loans from financial institutions (borrower farmers / KCC holders) for notified crops will be compulsorily covered.

Stopped Planting/Planting Risk: Planting/planting of the insured area is stopped due to low rainfall or adverse weather conditions.

Standing crops (sowing to harvest): Comprehensive risk insurance is provided to cover unpreventable risks such as loss of produce. Drought, dry spell, flood, inundation, pest and disease, landslide, natural fire and lightning, storm, hail, cyclone, typhoon, tempest, hurricane and tornado.

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Post-Harvest Loss: Coverage is available only up to a maximum period of two weeks post-harvest for crops harvested in the field and allowed to dry in spread conditions after harvesting against cyclones and special perils of cyclonic rains and unseasonal rains.

Localized Disasters: Loss/damage caused by the occurrence of localized hazards of hail, landslides, and inundation affecting isolated farms in the notified area.

General Exclusions: Losses arising out of war and nuclear perils, malicious damage and other preventable perils shall be excluded.

The new scheme envisages many innovations such as using innovative technologies like satellite imagery, vegetation indicators etc. along with mandatory use of smart phones / hand held devices to increase speed and accuracy during yield estimation. To reduce zonal variation in coverage, the scheme also promotes digitization of land records.

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Efforts are being made to create awareness among farmers regarding PMFBY so that maximum number of farmers can enroll and avail the benefits of the scheme.

The Pradhan Mantri Fasal Bima Yojana (PMFBY) aims to cover the losses incurred by farmers due to shortfall in crop production as estimated by local appropriate government officials. The scheme also covers pre-planting losses, post-harvest losses due to cyclonic rains and losses due to unseasonal rains in India. In addition to the already covered hail and landslide risks, there is provision to cover losses caused by local calamities such as floods.

If the 'Actual Yield' (AY) per hectare of the insured crop (calculated on the basis of the required number of CCEs) for the insurance unit is less than the specified 'Threshold Yield' (TY), during the insured season, all the insured farmers grow that crop. A defined area is assumed to face a reduction of the same magnitude in production. PMFBY seeks to provide coverage against such contingencies. The latest research study “Crop Insurance Market: Global Industry Trends, Share, Size, Growth, Opportunities and Forecast 2023-2028” by IMARC Group found that the global crop insurance market size has reached US$ 40.7. billion in 2022. Looking ahead, IMARC Group expects the market to reach US$ 66.6 billion by 2028, exhibiting a CAGR of 5.9% during the period 2023-2028.

Crop insurance refers to comprehensive yield-based policies that protect farmers from financial losses due to crop failure or uncertainties arising from various unforeseen hazards beyond their control. In terms of coverage type, they can be divided into multi-peril crop insurance (MPCI) and crop-hail insurance categories. These crop insurance policies pay for expenses related to crop damage caused by hail, drought, flood, fire, pests, etc. They also cover sowing and planting, price fluctuations in agricultural markets, standing and post-harvest losses. crops, and reduced crop production, which affects farmers' income. Consequently, crop insurance plans are in high demand among farmers and ranchers worldwide.

The Hazards Of Harvesting

Increasing incidence of severe weather conditions adversely affecting crop production due to global warming is primarily driving the crop insurance market. In addition, the launch of various initiatives by government agencies aimed at protecting farmers from fluctuations in crop prices, revenue and production is acting as another important growth-inducing factor. Furthermore, the introduction of satellites and drones and artificial intelligence (AI), Internet of Things (IoT), and customized mobile applications that help predict weather, store crop-related data, detect diseased crops. And the provision of micro-level information on land for harvesting is also having a positive impact on the world market. Accordingly, increasing use of remote sensing that helps in reducing uncertain risks and increasing agricultural yield is expected to stimulate the crop insurance market in the coming years.

The competitive landscape of the market is studied in the report along with detailed profiles of the key players operating in the market.

Agricultural Insurance Company of India Limited, Axa S.A., Chubb Limited, Great American Insurance Company (American Financial Group Inc.), ICICI Lombard General Insurance Company Limited (ICICI Bank Limited), Philippine Crop Insurance Corporation, QBE Insurance Group, Santam (Sanlam), Sompo International Holdings Ltd (Sompo Holdings Inc.), Tokio Marine HCC and Zurich American Insurance Company.

IMARC Group is a leading market research company providing management strategy and market research globally. We partner with clients across all sectors and regions to identify their highest-value opportunities, address their most pressing challenges, and transform their businesses.

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IMARC's information products include scientific, economic, and technological developments for business leaders in major market, pharmaceutical, industrial, and high-tech organizations. Market forecasting and industry analysis for biotechnology, advanced materials, pharmaceuticals, food and beverages, travel and tourism, nanotechnology and novel processing methods are at the top of the company's expertise. Crop insurance fraud in India is a contrasting story in areas where it has been infiltrated. High, and default where awareness and coverage is low.

Crop insurance schemes for poor farmers are linked to loan defaulters and premium payers. This makes it practical during times of disaster.

The image of a farmer hanging himself from a tree in the center of the capital haunts India, perhaps for the first time that urban India may have to face a self-destruction that has so far seemed thousands of miles away. Bharat city slickers found it hard to put a finger on.

And if thousands of farmers are killing themselves in their ruined fields, it's not just because the weather gods are cruel; This is also because, in the case of crop insurance, protection from such clitic flippancy has failed when he needed it.

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Suicide cases from all over the country clearly show that these schemes have not found enough takers. Worse, even when the tenant has signed up for the policy, he is not eligible to claim when he is badly affected due to loan defaults.

A research by ET agazine suggests two main flaws, apart from very few flaws. There are two major problems with the design of these schemes, firstly, even the poorest farmers are expected to pay the premium. Second, if a farmer is trapped in a cycle of debt and defaults on his farm loan – to which his crop insurance scheme is linked – his policy becomes inoperative.

For example, thousands of farmers who have opened insurance plans through the Kisan Credit Card (KCC) scheme find that they cannot claim insurance due to their outstanding bank loans.

Earlier in the week, ET reported that hoe inster Rajnath Singh is keen to fast-track the uch-proposed National Crop Income Insurance Scheme, which would catalyze all remotely-related insurance schemes and provide cover for crop-related risks and price volatility.

How Big Is The Crop Insurance Market

As India looks headed for yet another below-equal unsoon, Hoi Inister's initiative is undoubtedly welcome, but if the new plans are to be effective, the government needs to plug the fundamental flaws, experts spoke to ET agazine.

Even though insurance is a mandatory feature of agricultural credit schemes, banks have copied such requests to achieve targets.

The government needs to legislate on this matter, requiring insurance cover to be compulsory and the government paying premiums for the sellers

Holding agricultural and bank officials accountable in crop insurance related procedures should also be a part of the law.

How Crop Insurance Protects Farmers

Aharashtra (Aurangabad and Jalgaon), Gujarat (Saurashtra), Andhra Pradesh (Rayalasia), Karnataka (Dharwad and Haveri), Telnadu (Nagapattina and Sivaganga) and Telangana (Ahbubnagar)

That the farmers have to pay the preiu and many farmers associations in many states have written letters to the insurance companies not to debit the insurance preiu is also accompanied by a backlash. Considering that banks are under pressure to achieve targets for KCC, they decide to waive the preiu coponent.

According to a senior official of a public sector insurance company, crop insurance schemes were linked to distant loans to provide comprehensive coverage. but must be preiu

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