Fewer than one fifth of India’s farmers are insured, a practice that exposes the vast majority of pastoralists to the vagaries of weather as was the case this year with vast damage caused to the spring harvest this year.
According to a new study, only 19% of farmers reported ever having insured their crops, with many being unaware of crop insurance.
Of the uninsured, 46% were found to be aware but not interested, while 24% said that the facility was not available to them. Only 11% felt that they could not afford to pay the insurance premium, the study found.
Government to step in
Around 32m farmers have enrolled in crop insurance schemes, with issues in design, particularly related to delays in claims settlement, have led to farmers not being covered, despite significant government subsidy.
“Implementation and technical challenges lie ahead which can be addressed but will require a comprehensive strategy, innovative solutions, and timely roll out,” said DS Rawat, secretarygeneral of the Associated Chambers of Commerce and Industry of India (Assocham), which commissioned the study.
To address the problems, the government is piloting a modified national agricultural insurance scheme, a marketbased scheme with involvement from the private sector.
Compared with the existing scheme, the new program is hoped to offer more timely claim settlement, with less distortion in the allocation of government subsidies and crosssubsidies between farmer groups, and reduced basis risk, Assocham said.
A major step forward
The government’s Farm Income Insurance Scheme will be rolled out soon for the autumn season. Apart from government players, the private sector has developed weatherbased crop insurance products.
Rawat added that the shift from a social crop insurance programme with adhoc funding from the government to a marketbased crop programme with actuarially sound premium rates and product design would be a major step forward.
“The improved product and active involvement of private sector insurance markets are expected to lead to significant benefits for farmers including faster claims settlement, a more equitable allocation of subsidies and lower basis risk,” he said.
New mobile technology could be used to implement crop insurance schemes more effectively, the report added.
Source - http://www.foodnavigator-asia.com/
