Money & Banking

‘Weather, farm insurance are not mutually exclusive'

Our Bureau Hyderabad | Updated on January 28, 2011

Dr. Abhijit Sen (left) member of Planning Commission with Dr. S. K. Rao, Director-General of ASCI in Hyderabad on Friday - Photo: P.V.SIVAKUMAR .   -  Business Line

Weather insurance should be offered to farmers simultaneously along with other agriculture insurance schemes, according to Dr Abhijit Sen, Member, Planning Commission.

In his keynote address at a national seminar on weather insurance organised by Administrative Staff College of India (ASCI) here on Friday, Dr Sen said: “There is a tendency to see weather insurance and agricultural insurance as mutually exclusive which, in my view, is not correct.”

Saying that weather insurance would add value to normal agricultural insurance, Dr Sen said it would be vital to repeat various pilots/experiments in similar regions as some sort of data had to be collected every year.

Referring to agricultural insurance, he said the segment had to move away from plan expenditure of non-plan expenditure.

“Till recently, agricultural insurance was not insurance because it was the Government which was paying in the place of insurance companies,” he added.

Mr J Hari Narayan, Chairman of Insurance Regulatory and Development Authority, said diversity in farmers' group and regions was an issue in agricultural insurance as that could increase the premiums.

Agricultural insurance in the country should be understood in terms of commercial agriculture and subsistence agriculture and insurance practice was more in commercial segment, he said.

As relief from Government was expected in times of catastrophes, there was little incentive for farmers in subsistence agriculture to take risk mitigation measures.

Mr M Narasimham, Chairman, ASCI, said reliable weather index and expertise such as actuarial practices were required for weather insurance segment.

Published on January 28, 2011

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