Agri Business

Nashik farmers sowing seeds of own insurance firm

Radheshyam Jadhav Nashik | Updated on December 17, 2019 Published on December 17, 2019

Farmers are working on the details of the insurance model so that fits in with the IRDAI framework   -  PAUL NORONHA

Sahyadri Farmers’ Producer Co leads initiative to ensure prompt payment for crop loss

To get a good insurance cover that will assure them compensation for crop loss due to natural disasters, farmers of Nashik plan to launch their own crop insurance company.

Nashik-based Sahyadri Farmers’ Producer Company, with over 8,000 marginal farmers as its members, has taken a lead for the insurance company initiative.

“For the last one year we have been working on launching farmers’ own crop insurance company. We will take the proposal to Maharashtra Chief Minister Uddhav Thackeray and by next year we will be in a position to launch our venture,” Vilas Shinde, Chairman of Sahyadri, told BusinessLine.

“Farmers are unsatisfied with the existing crop insurance companies. There are various issues, including loopholes in implementation, lack of transparency and data manipulation. Farmers are not confident about these companies, which have turned rich by collecting premiums from farmers. The only way is to have our own company,” he said. Shinde is confident that once farmers have ownership, there would be no scope for fraudulent practices.

Sahyadri is connecting with other farmer-producer companies with the idea and is confident of raising capital.

“Farmer-producer companies will invest in the insurance company. About 51 per cent shares of the company will be held by farmers while 49 per cent could come from a private player or the government,” said Shinde.

Major challenges

Convincing all farmers to join the venture and to win the confidence of private investors are the major challenges before Nashik‘s farmers. Shinde said that farmers are working on the details of the insurance model to fit it into the framework of the Insurance Regulatory and Development Authority of India (IRDAI).

In recent times, unseasonal heavy rainfall and frequent droughts have destroyed crops, making farmers vulnerable.

“We have to find a solution to our problem. Natural disasters are frequent these days and insurance companies have never settled in full.

“We can’t expect the government to pitch in with aid every time our crop is destroyed. We must have a reliable insurance company owned by farmers,” says grape farmer Ganesh Kadam.

Ganesh is confident that once farmers have ownership, the insurance company would run efficiently and the affected farmers would get immediate compensation.

A few months ago crop insurance companies in Maharashtra paid compensation of ₹1-5 to farmers who had lost their crop to natural disaster.

Insurance companies in the market are making a mockery of farmers, says Rajan Kshirsagar of Maharashtra State Kisan Sabha.

He alleged that in 2018-19 more than 1,230 farmers ended their lives in Marathwada and at the same time insurance companies made a profit of ₹1,237 crore from this region.

“The insurance companies got ₹1 crore profit after every farmer suicide in Marathwada. There are many glitches in the scheme. The insurance companies don’t even have a mechanism and the manpower to assess the damage caused to the crops” said Kshirsagar.

Bablu Jadhav, a farmer from Nashik, said that farmers have to take control of farming from sowing to insurance and only then will agriculture become a profitable venture.

He is confident that the farmers’ insurance company will start a new era in the agriculture insurance sector.

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Published on December 17, 2019
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