For time immemorial, agriculture has been the backbone India’s economy, with more than half the population depending on it for their daily sustenance. Despite its importance, farming continues to be one of the toughest occupations. Farmers are in a constant battle against erratic weather, crop diseases, pest infestations and fluctuating market prices. Amid these ongoing challenges, agriculture insurance has emerged as a much needed safety net. It gives farmers a sense of security which helps them in recovering losses and return to their work with their faith and hopes restored.
Why protecting our farmers is more important than ever
Today, climate change has made Indian agriculture more vulnerable than ever before. Monsoons are no longer predictable and extreme weather events like floods, droughts and cyclones are becoming more frequent. These conditions often result in crop failures that hit small and marginal farmers the hardest. Insurance can definitely play a key role here by covering their losses and also by helping them access credit, maintain steady income and manage the emotional toll of uncertainty.
The government’s role in making insurance accessible
To help farmers stay afloat, the Indian government launched initiatives such as the Pradhan Mantri Fasal Bima Yojana (PMFBY). This scheme provides broad coverage against crop failure, with the government subsidizing premiums so even the poorest farmers can afford protection. What’s more, the scheme makes use of modern technology like satellite imagery and drones to quickly assess damage and settle claims faster.
Still, the system isn’t perfect. Many farmers don’t know about these schemes or struggle to understand the process. Others are deterred by premium costs or delays in claim payouts. If agriculture insurance is to become a reliable risk management tool, these issues need fixing.
Making insurance work better for farmers
The current model is ambitious but could use some fine-tuning. Here’s how it can improve:
1. Smarter tech, smarter coverage” Using tools like AI, remote sensing and satellite imagery can help insurers more accurately assess crop health, calculate risk and verify claims. With better data, pricing becomes more precise. On-the-ground tech like local weather stations and mobile reporting apps can also bridge communication gaps.
2. Customised policies: India’s farms are diverse, from crops to climate to regional risks. Insurance should reflect that diversity. We need policies that are specific to local needs. Simple to understand, easy to enrol in and relevant to the crops grown.
3. Extending awareness. Many farmers miss out simply because they’re unaware or don’t trust the system. That needs to change. Awareness campaigns, backed by both government and private sectors, must be rooted at the village level. Financial education can empower farmers to make informed decisions.
4. Faster and fairer claims: Even with tech upgrades, claim delays are a sore point. A more transparent and digital process like real-time claim tracking or SMS updates can boost trust. Faster settlements mean farmers can recover quicker and get back to their fields.
5. Inclusive insurance: Coverage shouldn’t stop at crops. Livestock is just as crucial to rural livelihoods. Micro-insurance products with tiny premiums can make a big difference for the most vulnerable.
The climate question
Climate change looms large over everything. Higher temperatures, shifting rain patterns and more frequent disasters are changing the game. Old insurance models struggle to keep up, driving up costs. The industry needs to adapt with better forecasting, flexible pricing and tighter collaboration between insurers, climate experts and governments.
One promising solution is weather-index based insurance, which triggers payouts based on rainfall or temperature thresholds. It’s faster and less complicated but depends heavily on accurate local data and farmer trust.
Government collaboration is key
Both the central and state governments have roles to play. While the Centre handles the big-picture policy and funding, states handle the actual rollout; spreading awareness, adjusting to local needs and ensuring payouts. Seamless coordination and a transparent subsidy framework are vital to success.
A bright future for agri-insurance
India’s agriculture insurance sector is on the cusp of transformation. Climate risks, rising awareness, tech adoption and proactive policies are aligning to create real momentum. Private insurers are also stepping in with region-specific, crop-focused innovations.
But for this to truly work, the system must put farmers at the center. It must be clear, inclusive and responsive. With the right blend of policy, technology and empathy, agri-insurance can be more than a safety net. it can be a source of strength for India’s farmers.
The author is MD, Edme Insurance Brokers