Managing Crop Insurance

Farmer suicide is yet another indication of risky nature of farming, and one reason why many farmers wish to exit farming. Despite India having the largest programme of crop insurance in the world with more than 25 million farmers insured annually, it still does not generate confidence among farmers as a major support during crisis situation. Major reasons for this lack of confidence are:

  • Delay in payments to farmers are based on Crop yield measurements, which are quite time consuming, resulting in delayed settlements. Thus farmers who have suffered crop losses are not only unable to repay debts but also cannot access formal sector finance.
  • Crop yield data also goes through several levels, resulting in not only delays, but also manipulation by unscrupulous elements within the chain.

Agriculture Insurance Corporation of India, along with Rajasthan & Maharashtra govts and World Bank Team are recently testing a pilot scheme, under which GPS and video-enabled mobiles are used to record the harvest. It has developed a specific app, which enables recording and transfer of data from the farmers’ fields to Insurance company’s server. The data is then uploaded for consolidation and analysis. This is likely to hasten the process and enable a farmer who otherwise gets his compensation only after several months, within a few days.

As revealed in the latest ASER report, learning is a huge challenge and should be the focus for the Govt. Now that it is moving in achieving the infrastructure targets.

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