India - As dry spells and untimely rains hit farmers, how helpful is the PM crop insurance scheme?

21.09.2022 1065 views

Climate chaos has struck Indian farmers again.

This time, it has come as untimely and excessive rainfalls in many parts of central and western India. Earlier this year, the Rabi wheat harvests were short due to heat waves and untimely rain, especially in Punjab and Haryana. These pushed our government to ban wheat exports. But now an unstable monsoon has exacerbated farmers troubles. 

Major dryland crops such as soybean, urad (black gram legume), moong (green gram) and bajra (pearl millet) appear to have suffered major losses this year. 

Different agro-climatic zones where these crops are grown have all been hit with excessive rainfall, which has resulted in partial – and in many places, total – loss of the Kharif crop. The fertile belt of Kota extending into Madhya Pradesh and parts of Uttar Pradesh have received more than usual rain, which has directly impacted oilseed crops like til (sesame) too.

In the south, excessive rainfall was reported in Kalyana Karnataka and Bombay Karnataka regions, resulting in damage to about 11 lakh hectares of standing crops. These include bajra, chilly, jowar, legumes, oilseeds, and so on.  

Overall, India’s paddy sowing deficit is about 4.52%, because of prolonged dry spells and untimely weak rainfall throughout the country. Over 91 districts of Uttar Pradesh, Bihar, Jharkhand and West Bengal, all major paddy areas, have reported drought.

To take stock of the current crisis, we spoke with the director  of ICAR-Agricultural Technology Application Research Institute, Sushil Kumar Singh, about the rainfall and crop losses. 

“We are getting reports of crops damages to urad, soybean, moong and til in many areas. For example, the black soil region of Kota region received over 400 mm of excessive rainfall this year. The neighbouring Jhalawar is cut off, because of heavy rains. Except for some paddy farmers, all other corps have been affected, and as per reports, 20% of the urad has been lost. As much as 15%-20% of the soybean is also lost because of the rainfall. There are also reports from Jaipur-Ajmer belt where excessive rain and water logging has destroyed the til crop,” Singh explained. 

Til and soybean farmers in Madhya Pradesh and drier parts of Uttar Pradesh do indeed report crop losses due to rainfall. In fact, moong farmers across the central heartland have reported seed loss due to the rainfall. Meanwhile, in the Jodhpur belt, moong farmers seem to be affected with a different problem.

“Due to rainfall, the acreage under moong has grown, but we saw extra vegetative growth in these plants, which will result in lesser per plant yield. Rajasthan’s overall production may increase as more acreage is under moong, but the per acre yields will be hit,” Singh warned. 

Speaking of dryland crops, we also spoke with Bajra farmers in Rewari-Mahendragarh, who have reported crop losses. They foretell a below average bajra harvest this year. “The late monsoon and excessive heat this year has resulted in 20-25% loss. Ours is a monsoon-dependent bajra belt. Some of the farmers had to mulch their bajra, because it was damaged or didn’t fruit well. Keep in mind that some farmers had sowed bajra three times, and yet had crops failed,” said Sanjeev Yadav from Rewari. Yadav grows bajra on four acres of land.

S.K. Singh, while unalarmed by bajra reports from Haryana, explained the Rajasthan scenario with slight concern. “Bajra grows well in sandy soil belts like Barmer, Jalore, Jodhpur and so on. Due to no August rains in these areas, the crop may be slightly affected. But overall bajra production in Rajasthan will be good. Of course, there are crop losses in areas hit by excessive rains,” he said.

There have also been sporadic reports of post-harvest bajra losses. After harvest, many farmers keep the bajra on the fields, exposed to the open sky. With untimely rain, many of the bajra lots risk being exposed to black fungal rot. 

Farmers in the Kota area offer a grim picture. Vansh Singh, a progressive farmer, says there has been little help. “Soybean, maize, urad are heavy affected in Bundi, Kota, and Jhalawar areas. Some farmers I met have reported 50% crop losses. It is quite evident our region is suffering, yet government help is not reaching all,” he said.

Vansh alleged that limited number of people were given compensation, whereas the rest were left to fend for themselves. 

“There is a small section of farmers who are receiving benefits, the rest of us, including mid and large farmers have also lost crops, and need government help. Yet even the crop insurance schemes don’t come to our aid. People who are getting help from the crop insurance schemes are also only getting inputs costs at best. Agrarian problems are only going to increase in our region, if help doesn’t come fast,” Vansh said. 

In Western Madhya Pradesh, the situation was worse. All the border villages and their crops were affected. Here, one Sumer Singh Garha says, “For two consecutive years our area has been receiving excessive rainfall. Guna, Shivpuri, and neighbouring areas have already reported heavy rainfall and the monsoon is not over yet. Guna especially the western and north western parts are flooded and suffer from crop losses. Currently, 50 panchayat and about 150 villages are reeling,” Singh said. 

“The river Parvati is flooded due to upstream check dams having been opened. As a result, some villages have 50-60 feet of water. And 90% of crops including soybean, urad and maize are damaged. In our region the soybean farmers can’t even produce next season’s seed this year,” Sumer explained. 

Madhya Pradesh is a Bharatiya Janata Party-ruled state. What of the Pradhan Mantri Fasal Bima Yojana?

“There is no implementation and the state government data is highly questionable. Most farmers here have not got adequate compensation. And for those who have received government aid, it doesn’t account for the land owned and crop lost. The government is handing out Rs 5000 per farmer, irrespective of whether the farmer has one acre of land or 10. The state government is trying to save crop insurance money, perhaps,” Sumer said. 

Sumer, along with other farmers, have suffered a bad harvest, and feel helpless with the government not doing its bit. 

“Each time we borrow money on Kisan Credit Cards our insurance premiums are immediately deducted and go to the insurance company. But now that there are crop losses, we are not getting the insurance money. The state government is mis-reporting the damages, to lessen its claims. There is also no verification on the grounds. No crop damage surveys are being conducted. And farmers that have received the crop insurance benefits can show that only input costs are reimbursed and not the crop value, as promised under the scheme,” Singh narrated. 

Source - https://thewire.in

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Canada - Beef farmers want fair shake for livestock price insurance

The government cost shares funding for crop insurance; beef producers say livestock insurance options should get the same treatment.Livestock producers face a fundamental inequality when it comes to business risk management (BRM) programs in Canada — but industry groups are proposing a fix.One of the starkest differences is in government-based insurance programs. Crop producers enjoy coverage that’s typically subject to a 60/40 government/producer split, with provincial and federal governments picking up the largest part of the tab.Organizations such as the Canadian Cattle Association are calling on the feds and provinces to share the cost of pricey livestock price insurance (LPI) premiums with beef producers along the same lines, says Tyler Fulton, president of the CCA, who also serves as co-chair of the association’s foreign trade committee.That would bring some equivalency to these BRM programs, says Fulton. Crop insurance covers yield loss, the biggest risk for crop growers. Meanwhile, downward market shifts — which LPI insures by allowing cattle producers to set a minimum price floor — present the greatest risk for those farmers.Much of the new interest in LPI is in response to the threat of US tariffs, he says. Many LPI policy holders intend to use it as a tool to manage them should livestock and meat ever be targeted.“By virtue of the fact that we sell 50 per cent to export of what we produce here in Canada, we are very reliant on the export markets to help determine our price,” says Fulton.“And so when we see the tariff threats of 25 per cent it represents probably one of the biggest risks that we could experience, bar none. It’s just very significant because the U.S. represents such a large market for Canadian beef and live cattle.”An LPI cost-share agreement would also be a relative bargain compared to the government’s cost of supporting crop insurance premiums, he says. Crop insurance requires several billion dollars in government support while a similar model of support for LPI would be closer to $150 million to $200 million, said Fulton.Although he says the federal government is coming around to the idea of LPI cost-sharing, it has previously cited trade risk and prohibitive cost as reasons to not participate.Fulton doesn’t think those arguments hold water in an environment already brimming with trade risk from U.S. tariffs, especially with many beef producers still priced out of the LPI market.“It’s really frustrating that we can’t effectively cover the risk because the government says that it’s too risky in this environment.”Ultimately, beef and crop production are related but separate ag sectors with their own specific needs, says Fulton, and a perceived “one size fits all” philosophy driving government-funded BRMs isn’t cutting it.”I think that we need to move to a model that is more industry-specific. It’s really difficult, if not impossible, to design a safety net program or a risk management program that works well for all sectors of agriculture.”Brian English, a beef producer from Rivers, Man. who runs a cow-calf, feeder and backgrounding operation at nearby Bradwardine, took out an LPI for the first time this year. He also highlights the government’s treatment of crop growers compared to beef producers.“Why shouldn’t we get the same benefits as these guys that are putting in thousands of acres of cropland?” he said. “We should be on equal footing as them. The federal and provincial governments should do the same funding schedule for livestock price insurance as they do for crop insurance now.”English took out an LPI policy this year in response to the threat of U.S. tariffs.“Trump had put on the tariffs for two-and-a-half days (and) we heard the horror stories of the cattle crossing the line getting $1,000 tariffs on each animal. And then (the U.S.) stopped that for a brief period of time and there was a chance that it was going to come back on right away.”LPI has historically been a hard sell to beef producers due to policy cost. Fulton estimates a high rate of $50-$60 per calf for a calf policy (the program has three cattle policies available: calf, feeder and fed) on a 10-year margin.However, thanks to high prices in all cattle categories in recent years, margins are much better today. That offers extra incentive to take out an LPI policy because beef producers will have more to lose once the bull market (in investment terms) goes bearish, he says.“$50 to $60 in today’s market is not as significant. It’s not as big a barrier, but it’s still a large barrier when talking about an individual animal (and) having to pay $50 or $60 just to be able to cover it.“If you get 60 per cent of the cost of your insurance policy covered, it really changes the motivation and the desire to actually cover off that risk because you’re not using up a bunch of your profit margin just to insure it.”Beef cattle graze in a pasture in Saskatchewan. Photo: Michael RobinOther LPI changes neededFulton would also like to see a widening of LPI’s application window. Although applications for feeder and fed policies are accepted year-round, calf policies are only available from February to June each year. However, risk exposure continues long past June.“So for most of the year the tool is not accessible.” English has a technology-based suggestion for improving the program. He says the application website needs to be more user-friendly for cell phone users and especially those who live in areas with limited internet bandwidth.“It’s just a little daunting the first time that you’re (applying) … It’s kind of clunky. It’s not iPhone friendly and I do everything on my phone.“We put all our records of our cattle on our phone, check on our weather. Everyone uses their phones more than a laptop and so I think if they made it so that it was a little easier to use on your phone, it’d be that much easier also.”Balanced outcomesThere could be some positive tradeoffs with other government BRMs if a cost-share arrangement for LPI is developed, says Fulton. For example, AgriStability payments wouldn’t trigger as easily if beef producers already had coverage through LPI.(AgriStability is a federal-provincial-territorial program meant to protect farmers from extreme market price declines that threaten the viability of their farms.)“Let’s say a 20 per cent tariff is implemented by President Trump and our prices here in Canada drop by 15 to 20 per cent. That would likely trigger a payment in AgriStability normally,” explains Fulton.“But if we had coverage with livestock price insurance, for those that had a policy it would result in a payment through livestock price insurance and therefore would not result in a drop in your farm income and consequently you wouldn’t need to trigger an AgriStability claim.”It’s a scenario Canadian crop producers already enjoy, he says.“Because people have crop insurance, they can experience a 40 per cent hit in their yield (and) they get a payment through their crop insurance policy. They don’t make an AgriStability claim because they’re already covered off through their insurance.”Government willing to talkThe beef industry is slowly but surely catching the ear of government on cost-shared LPI policies. Fulton says both the federal Conservative and Liberal parties — motivated in part by U.S. tariff threats — were interested in providing better risk management tools to farmers prior to the federal election.“This represents a cattle industry-developed program that works really well and so when we started to get exposed to the tariff issues, it really changed the conversation. It just made it very obvious that there was a deficiency here and they identified that.”Fulton has spoken with new federal Agriculture and Agri-Food Minister Heath MacDonald and hopes to meet with him soon to address the uncertainty and risk the industry is facing. He’s counting on the Prince Edward Island-dwelling MacDonald having an understanding of LPI, given Maritime producers have been eligible since last year.Countervail fearsAn attendee of Manitoba Ag’s Navigating Livestock Price Insurance webinar on May 8 asked if cost-shared premiums would trigger countervail action from the U.S. The answer is “unequivocally no,” says Fulton.“The industry is not at all concerned about a countervail duty related to livestock price insurance cost-shared premiums,” he says.“Our American counterparts have a very similar program that is cost-shared and it is really structured similarly to their crop insurance program, and so they’re addressing what they’ve identified to be a gap in risk management tools offered for farmers and inequity for livestock operations.”Source - Manitoba Cooperator