Money & Banking

Tech-based crop insurance solutions coming soon

GNAGA SRIDHAR KV KURMANATH Hyderabad | Updated on January 24, 2018

Satellite images to be used to measure acreage/yield

The Insurance Regulatory and Development Authority of India (IRDAI) is in the process of inducing technology-based changes to make crop insurance foolproof.

The regulator has sent communication to the State Governments of Madhya Pradesh and Punjab to launch field level pilot programmes to test some new measures, a senior IRDAI official told BusinessLine here.

The government and IRDAI had commenced the exercise to address problems on the crop insurance front early this year and proposed the launch of a pilot programme.

If things move ahead as planned, these two States will be roped in to introduce measurement of acreage or/and yield on the basis of satellite images in place of physical measurement being used now, the official added.

Low penetration

The low penetration of farm insurance has been a concern. For instance, according to the data given in IRDAI’s annual report for the year 2013-14, the Modified National Agricultural Insurance Scheme (MNAIC), which was launched as pilot in Rabi 2010-11 to Kharif 2013, covered only 51 lakh farmers for a sum insured of ₹13,497 crore.

Crop insurance is not on the agenda of a majority of farmers due to the high premium rates and a host of other problems.

Farmers’ unions argue that the premium levels were prohibitive, making it virtually impossible for farmers to take insurance. Insurance terms and coverage of crops too were not enticing enough to make farmers to take cover. The All-India Kisan Sabha (AIKS) has said that premiums range from 7-10 per cent. “For cotton and chillies it works out to ₹600-700 an acre. Moreover, they pick a crop for each district and offer cover only to that crop,” Sarampally Malla Reddy, Vice-President of AIKS, said.

Pay for sub-10 acres

“If the State and Central Governments are really serious to make agricultural insurance a success, they must subsidise it. They must pay premium for all the farmers with less than 10 acres. Farmers having more land would pay 50 per cent of their premium charges,” he said.

Farmers also felt that piecemeal efforts would not do. “Of the 23 crops, they are offering cover for only four or five crops. This must change,” he said.

Inordinate delay in crop cutting experiments is also hurting farmers, the IRDAI official said.

Published on July 06, 2015

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