The insurance companies providing the cover play an important role in executing the scheme and thereby its successful implementation. KG Krishnamoorthy Rao, MD & CEO, Future General India Insurance said, "scheme proposed seems to be good from the farmer's point of view since the premium payable from the farmer is likely to be reduced and the claim settlement process is made simpler. However we need to see the detailed rules about the scheme to understand it better."
Source - economictimes.indiatimes.com
Anuj Tyagi, Member of Executive Management, Corporate & Rural Business and Reinsurance, HDFC ERGO also agreed that the scheme has a host of features which makes it a perfect solution tailor made to suit the needs of the Indian farmer.
Most of the insurance companies feel that success of this program lies in increasing awareness amongst the farmers about this scheme. Ashish Agarwal, Head, Agri Business, Bajaj Allianz General Insurance said, "Only premium reduction would not help much in increasing coverage of farmers under the scheme. There is also an urgent need to launch campaigns to educate farmers and create awareness about the scheme among them."
Krishnamoorthy Rao of Future General Insurance said that as the schemes are government run, the insurer has limited scope to spread awareness about this. However, Ms Kavitha Kuruganti, member of farmer rights activist group Alliance for Sustainable and Holistic Agriculture (ASHA), asserts that companies need to play a vital role in bringing about awareness among farmers on the scheme and its details. In an email response she said, "Insurance companies today hide behind the banks. The banks are the front-end transaction faces for crop insurance. Farmers are not even aware that premium is being deducted for insurance from their crop loan amount disbursals." The banks currently manage the process of enrolment of farmers on behalf of insurance companies. Farmers taking loans take insurance by default, but a majority of those who haven't taken loan from banks are not even aware of crop insurance scheme. Among the insured farmers only 10% of them haven't taken loan from banks.
Insurance companies though differ with the view that there are a lot of constraints when it comes to crop insurance. Sources among insurance companies who prefer not to be named, said that lack of e-records on land is a big constraint for crop insurance. Only few states in India possess e-records for land owned by farmers. They believe if crop insurance is made mandatory, it may improve the coverage significantly.
This is not the first crop insurance scheme. Various other schemes were launched on earlier occasions — Comprehensive Crop Insurance Scheme (CCIS) in 1985, National Agricultural Insurance Scheme (NAIS) in 1999 and Modified National Agricultural Insurance Scheme (MNAIS) in 2013. But these schemes were not able to bring in enough number of farmers under crop insurance due to high premium, lack of land records, low awareness and absence of coverage for localised crop damage.
The Assessment of the damaged crops has also been a major bone of contention for farmers as well as insurers. The government has suggested using new age technologies such as remote sensing, drones for faster and accurate measurement of damages to crops.
However, not everyone is convinced about it. Farmer activist Kuruganti says, "We think verification is certainly possible, but assessment still requires human interface since remote sensing has not evolved to an extent that it can captur village-wise details, for all crops notified as of now."
Insurers though believe that with the wide reach of mobile phones and government's digital India push, technology can be adopted to overcome those challenges. Rao said, "We need to learn from some other countries where such technology is deployed."
For the scheme to be truly beneficial to farmers the government needs to engage them at all the levels. The central government should urge state governments to expedite the collection of digital land records. The faster adoption of modern technologies to assess the damage will be crucial in implementing the scheme. Payment of premium to insurance companies by the government without delay would also ensure that money is disbursed to the farmers without hassle.
