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Crop cover: Satellite images to assess claim payouts

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Radhika Menon

Mumbai, Dec. 4

REMOTE sensing technology has now made its way to crop insurance. The Agriculture Insurance Company (AIC) will, for the first time in India, be using satellite images to capture crop vigor (biomass) and assess claim payouts to farmers.

Mr Suparas Bhandari, Chairman and Managing Director, Agriculture Insurance Company, told Business Line that the company will be using this technology for its wheat insurance policy.

"The company's wheat insurance product is unique in the sense that crop vigor will be estimated in terms of Normalised Difference Vegetative Index (NDVI) through remote sensing based satellite images. This will be used as a parameter for deciding indemnity paid to the farmers," he said.

The NDVI would capture crop health and, hence, cover other yield limiting factors such as natural calamities and extreme weather conditions.

The remote sensing technology in India has been mainly used for geographical information systems, town planning, oceanography and defence purposes.

In countries such as the US and Canada, where a farmer could own as much as a thousand hectares, satellite images are used for claim payouts in the case of hail storms and other calamities.

The NDVI is created with the help of images procured over a period of eight years from the National Remote Sensing Agency. This will be compared with the satellite images of the crop during the season when the vigor is at its peak.

Agriculture Insurance Company has hired two firms Risk Management Solutions India and Birla Technology Services for processing the satellite images.

Mr Bhandari said wheat insurance product is being launched in six districts Ambala, Karnal and Rohtak in Haryana and Bhatinda, Ferozepur and Kapurthala in Punjab. Around 10 lakh hectares in these districts are under wheat cultivation.

Besides NDVI, high temperature in March will also be used as parameter for the claim payout. The maximum payout has been fixed at Rs 10,000 per hectare, which includes Rs 5,000 under each of the parameters. The premium will range between Rs 300 and Rs 500 per hectare.

AIC is considering using the remote sensing technology for insuring tea plantations across the country. A pilot project is under way in the Idukki district in Kerala where satellite images of the tea plantations will be processed in December. The tea insurance product is expected to be ready by next year.

"Satellite images have to be taken when there is no cloud cover in the region under consideration. Hence, it is easier in the case of rabi crops rather than kharif," said Mr Bhandari.

The company is also planning the use of satellite images for designing insurance cover for crops such as sunflower, cotton, mustard and rice.

(This article was published in the Business Line print edition dated December 5, 2005)
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