The Nashik-based Sahyadri Farmers’ Producer Company recently invested in a start-up working in the weather station and sensor manufacturing space, which will help to put up weather stations at every farm at an affordable price.

Also, Sahyadri is working on digital technology that will collect this data and provide real-time positioning at the farm level with effect to weather risks.

These are steps towards establishing farmers’ own crop insurance company. “We are seriously working on our own insurance schemes. For horticulture crops, accurate weather data is a basic need for efficient insurance products. And hence we have started with weather station infrastructure. We are confident that farmers’ own insurance companies will benefit farmers, compared to other crop insurance companies”, said Vilas Shinde, Chairman and Managing Director of Sahyadri Farms. Sahyadri, with 8,000 marginal farmers as its members, is a leading producer company in India in the fruit and vegetable sector that contributes around about 10 per cent share of India’s total grape export.

Sahyadri’s model of a crop insurance company is based on farmer-producer companies investing in the insurance company where 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.

Sahyadri’s plan has evoked interest across the spectrum. Shinde and his colleagues have already put up the idea before politicos and private players and are confident that this would be a game-changer move in crop insurance.

G Srinivasan, Director, National Insurance Academy (NIA), Pune, said that public sector insurers have the advantage of huge presence, especially in tier-3 and -4 towns, which can help them in connecting to the farmers and local government officials more effectively. “AIC has played a great role in handling crop insurance schemes very well over the years and they have developed good expertise,” said Srinivasan, adding that it is necessary that all insurers develop adequate expertise and have enough manpower to run the scheme efficiently.

Srinivasan said that the issue of delay in settlement of claims has been affecting the popularity of the scheme. The manual processes of crop cutting experiments have their limitations and have contributed to grievances. Technology adoption can remove some of the irritants in the whole process.

But Sunil Pote of Yuva Mitra, a social development organisation working in Maharashtra that has facilitated the formation of Farmers’ Producer Companies, sounds a note of caution.

Risks involved

“We have tried our own insurance scheme for goat and pomegranate and we realised that it is not easy to manage an insurance company, by the farmers and for the farmers. Our ventures were not profitable for two reasons. The insurance company needs a large scale and we didn’t have that. High premiums dissuade farmers but without high premium, the company cannot be profitable” said Pote. He also said that farmers would get more benefits if they go for private insurance cover instead of going to government crop insurance schemes.

But Agriculture and economy expert HM Desarda, who is a former member of the State Planning Commission, is hopeful about farmers’ own crop insurance experiment. “The current scheme is not planned to benefit farmers, but insurance companies. An entire new policy for crop insurance is needed and the government must facilitate the formation of farmer-owned crop insurance companies”. He added that the government must build a new framework for fixing remunerative prices. “A totally new approach and a new perspective is needed for crop insurance,” Desarda said.

Farmer Prashant Pawar said there is no harm in experimenting with farmer-owned crop insurance companies. “Initially the idea of FPOs was not welcomed. But today FPOs have benefited farmers in a big way. On similar lines, crop insurance companies must be established”, he said.

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