This article describes the various challenges and opportunities in implementing Agriculture insurance in India. It also details the historical insurance programs and crop insurance schemes implemented by the Government of India in the past few decades.
Crop insurance schemes have evolved in India over several decades to protect farmers from risks of crop failure. The current National Agricultural Insurance Scheme (NAIS) was launched in 1999 and makes crop insurance compulsory for loan-taking farmers. It covers lower premiums but has limitations like delayed claims, low compensation levels, and exclusion of certain risks. The Modified NAIS launched in 2010 uses actuarial premiums with government subsidies to make premiums affordable for farmers. It aims to address some issues but challenges remain in accurately designing insurance indices and assessing losses. Improving coverage levels, reducing assessment costs, and faster compensation are suggested to strengthen crop insurance for farmers.
It includes the condition of Agricultural Insurance before the independence and after the independence and currently running insurance scheme in 2015-16.
Presentation by P Joseph, Agriculture Insurance Company, on crop insurance in India at the CCAFS Workshop on Institutions and Policies to Scale out Climate Smart Agriculture held between 2-5 December 2013, in Colombo, Sri Lanka.
The document provides an overview of the Pradhan Mantri Fasal Bima Yojana (PMFBY) crop insurance scheme in India. The key points are:
1) PMFBY aims to provide insurance coverage and financial support to farmers against crop failure from natural disasters and stabilize farmer incomes.
2) It covers food and oilseed crops as well as horticultural crops. Insurance is provided at the village level and premium subsidies are shared equally by central and state governments.
3) Farmers availing loans are covered compulsorily while others can opt-in voluntarily. Premium rates are 2-5% of the sum insured depending on the crop season. Claims are paid out based
This document provides an overview of crop insurance in India, including the evolution of different schemes. It discusses the risks faced by Indian farmers and different approaches to crop insurance. The major schemes discussed are the Pilot Crop Insurance Scheme from 1979-1984, the Comprehensive Crop Insurance Scheme from 1985-1999, the Experimental Crop Insurance Scheme in 1997-1998, and the National Agricultural Insurance Scheme implemented from 1999 to present. It provides details on the features and performance of each scheme. Key challenges identified include only covering loanee farmers, limited crop coverage, low sums insured, and high claim ratios under previous schemes.
PMFBY is India's crop insurance scheme that aims to provide financial support to farmers and stabilize incomes. It was launched in 2016 to replace previous schemes. Key features include lower premiums paid by farmers, coverage of prevented sowing, post-harvest losses, and use of technology in claims settlement. Implementation is through state governments and public/private insurance companies. While PMFBY aims to benefit farmers, limitations include poor awareness, issues with premium deductions, and gaps in loss assessment. Strengthening implementation at state and local levels could help more farmers gain from the scheme.
Agricultural marketing plays an important role in rural development in India by facilitating the exchange of agricultural inputs and outputs. It encompasses issues related to agricultural development and aims to achieve sustainable economic growth. The document defines agricultural marketing and outlines its key functions such as developing agricultural markets and policies that benefit farmers, consumers, buyers and sellers. It also classifies agricultural markets in India based on various factors and discusses challenges faced by India's agricultural marketing system such as seasonality of sales, lack of infrastructure, and multiple middlemen.
This document provides an overview of an agribusiness management course. It includes definitions of agribusiness and management. Agribusiness involves three sectors - input, farm, and product. It is important for the Indian economy. Management is the process of achieving goals through organizing group efforts. Good management is key to a firm's success and involves balancing human and technical dimensions.
Crop insurance schemes have evolved in India over several decades to protect farmers from risks of crop failure. The current National Agricultural Insurance Scheme (NAIS) was launched in 1999 and makes crop insurance compulsory for loan-taking farmers. It covers lower premiums but has limitations like delayed claims, low compensation levels, and exclusion of certain risks. The Modified NAIS launched in 2010 uses actuarial premiums with government subsidies to make premiums affordable for farmers. It aims to address some issues but challenges remain in accurately designing insurance indices and assessing losses. Improving coverage levels, reducing assessment costs, and faster compensation are suggested to strengthen crop insurance for farmers.
It includes the condition of Agricultural Insurance before the independence and after the independence and currently running insurance scheme in 2015-16.
Presentation by P Joseph, Agriculture Insurance Company, on crop insurance in India at the CCAFS Workshop on Institutions and Policies to Scale out Climate Smart Agriculture held between 2-5 December 2013, in Colombo, Sri Lanka.
The document provides an overview of the Pradhan Mantri Fasal Bima Yojana (PMFBY) crop insurance scheme in India. The key points are:
1) PMFBY aims to provide insurance coverage and financial support to farmers against crop failure from natural disasters and stabilize farmer incomes.
2) It covers food and oilseed crops as well as horticultural crops. Insurance is provided at the village level and premium subsidies are shared equally by central and state governments.
3) Farmers availing loans are covered compulsorily while others can opt-in voluntarily. Premium rates are 2-5% of the sum insured depending on the crop season. Claims are paid out based
This document provides an overview of crop insurance in India, including the evolution of different schemes. It discusses the risks faced by Indian farmers and different approaches to crop insurance. The major schemes discussed are the Pilot Crop Insurance Scheme from 1979-1984, the Comprehensive Crop Insurance Scheme from 1985-1999, the Experimental Crop Insurance Scheme in 1997-1998, and the National Agricultural Insurance Scheme implemented from 1999 to present. It provides details on the features and performance of each scheme. Key challenges identified include only covering loanee farmers, limited crop coverage, low sums insured, and high claim ratios under previous schemes.
PMFBY is India's crop insurance scheme that aims to provide financial support to farmers and stabilize incomes. It was launched in 2016 to replace previous schemes. Key features include lower premiums paid by farmers, coverage of prevented sowing, post-harvest losses, and use of technology in claims settlement. Implementation is through state governments and public/private insurance companies. While PMFBY aims to benefit farmers, limitations include poor awareness, issues with premium deductions, and gaps in loss assessment. Strengthening implementation at state and local levels could help more farmers gain from the scheme.
Agricultural marketing plays an important role in rural development in India by facilitating the exchange of agricultural inputs and outputs. It encompasses issues related to agricultural development and aims to achieve sustainable economic growth. The document defines agricultural marketing and outlines its key functions such as developing agricultural markets and policies that benefit farmers, consumers, buyers and sellers. It also classifies agricultural markets in India based on various factors and discusses challenges faced by India's agricultural marketing system such as seasonality of sales, lack of infrastructure, and multiple middlemen.
This document provides an overview of an agribusiness management course. It includes definitions of agribusiness and management. Agribusiness involves three sectors - input, farm, and product. It is important for the Indian economy. Management is the process of achieving goals through organizing group efforts. Good management is key to a firm's success and involves balancing human and technical dimensions.
Chapter 1 Introduction, Scope and Nature of Agricultural financeGorakh Dhami
This document discusses the meaning, definitions, nature, scope and significance of agricultural finance. It defines agricultural finance as the economic study of farmers borrowing funds and the organizations that lend to agriculture. Agricultural finance can be examined at both the macro and micro level. At the macro level, it deals with total credit needs for the agricultural sector, while at the micro level it focuses on financial management of individual farm businesses. Agricultural finance plays a vital role in agro-socioeconomic development by increasing productivity, farm income, and reducing economic imbalances. It is also important for supporting infrastructure and technology adoption to modernize traditional agriculture.
The document discusses the 3Rs of credit analysis - returns from investment, repayment capacity, and risk bearing ability. It provides details on evaluating each of these factors for determining the credit worthiness of farmer-borrowers. Returns depend on crop selection and management decisions. Repayment capacity is influenced by income, expenses, and other quantitative and qualitative factors. Risk bearing ability considers production, price, and personal risks. Measures to strengthen the 3Rs include adopting new technologies, managing resources and expenses effectively, and increasing farmer equity.
1. Demand forecasting of seed involves anticipating the required seed quantity on the open market by understanding consumer behavior and other factors like total cultivated acreage, seed replacement rates, new varieties introduced, and climate.
2. The production of breeder seed is overseen by ICAR and undertaken by research institutions and state agricultural universities to meet indents collected from seed producing agencies.
3. Foundation seed is produced from breeder seed to meet certification standards and is produced by organizations like NSC, SSC, and state departments of agriculture.
4. Certified seed production involves assessing state-wise demand based on area sown and producing certified seed through state seed corporations, cooperatives, and private seed producers
Agricultural finance deals with the study of credit provision and liquidity services for farm borrowers. It examines the financial intermediaries that provide loan funds to agriculture and how these intermediaries obtain funds. Agricultural finance can be examined at both the macro and micro level. At the macro level, it considers total credit needs and terms for the agricultural sector. At the micro level, it focuses on financial management of individual farm units. Common sources of agricultural finance include money lenders, traders, cooperatives, commercial banks, and microfinance organizations. Loans are classified by time period, purpose, and security. Weaknesses in rural credit systems include a lack of motivation, high interest rates, and poor recovery rates. Suggestions for
Agriculture helps to meet the basic needs of human and their civilization by providing food, clothing,
shelters, medicine and recreation. Hence, agriculture is the most important enterprise in the world.
The livestock insurance scheme provides insurance for small farmers and those dependent on dairy. It covers death or permanent disability of animals from diseases like foot and mouth disease or drought. The premium is 50% subsidized by the central government. It is implemented in 300 districts with Rs. 40 crores allocated in 2011-12, but only 6% of livestock is insured. State livestock boards implement it and select insurance companies. Claims require a veterinary certificate and tagged ear of the insured animal.
This document discusses dry land and farming systems approach (FSA) in India. It begins by noting that about 50% of India's cropped area is rain-fed agriculture due to limited irrigation. Productivity is low on these dry lands due to poor management. It then defines dry land farming as areas receiving less than 750mm of rainfall annually without irrigation. Dry land crops must complete their lifecycle without water. The document contrasts dry land and rain-fed farming and lists characteristics of dry land areas. It describes FSA as a multi-disciplinary approach that views farms holistically to improve production, income, and farmer welfare through sustainable systems. The objectives and methodologies of FSA are outlined, including analyzing existing systems and new options
Secondary agriculture involves processing primary agricultural outputs into finished goods for businesses and domestic use. It can add significant value and invigorate rural and urban economies. The government of India has taken several initiatives to develop secondary agriculture, such as establishing a Technical Advisory Committee on Secondary Agriculture to address constraints and opportunities. The committee proposed $2 billion in investment and analyzed how secondary agriculture could be developed in various sectors. Secondary agriculture is seen as a way to drive primary agriculture growth by establishing linkages between the sectors, diversifying primary outputs, and improving supply chain management.
- National Agriculture Market (NAM) is an electronic trading portal that connects existing agricultural commodity markets (mandis) across India to create a unified national market.
- It aims to reduce transaction costs and information asymmetry by allowing farmers to access real-time price and buyer information as well as sell their produce to a wider national market online.
- For states and their agricultural markets to participate, certain reforms are required such as a single trading license valid nationwide, single point collection of market fees, and the provision for electronic auctions.
This document provides an overview of crop insurance in India, including the various approaches, concepts, types of crop insurance schemes, and the evolution of crop insurance in India. It discusses the National Agricultural Insurance Scheme and its key challenges, as well as the Weather Based Crop Insurance Scheme. It also briefly covers livestock insurance schemes in India.
The document discusses guidelines for bankers to analyze credit applications from farmers in India. It outlines factors to consider like returns from investment, repayment capacity, and risk bearing ability. Repayment capacity depends on gross returns, expenses, consumption, other loans, skills. It also discusses the 5 Cs, 7 Ps, and different repayment plans for loans like lump sum, amortized decreasing/even, and variable plans. The key points are evaluating the viability and risks of proposed investments, a farmer's ability to repay based on their financial situation, and choosing appropriate loan repayment structures.
Kisan Credit Card is a credit card provided by banks to farmers in India to enable them to access affordable credit. Studies have shown Kisan Credit Cards have increased crop yields, farm incomes, and cropping intensity for beneficiary farmers. One study found wheat crop yields increased by 82% and incomes increased by 75% due to access to credit through Kisan Credit Cards. Another study found beneficiary farmers had a higher cropping intensity of 233% compared to 208% for non-beneficiary farmers, and beneficiary farmers allocated more land to commercial crops. Access to credit through Kisan Credit Cards also enables farmers to purchase higher quantities of inputs like seeds, fertilizers and employ more farm labor, thereby increasing productivity and incomes.
India is a nation of youth, based on United Nations data, India’s populationhas crossed 141 crores, there are more than 65% of population below theage of 35 presently in the country.
Agriculture provides employment to 58% workforce of India andcontributes to more than 18% of India’s GDP.
Feeding the people will never face a recession or a slowdown. Economistshave pointed out that agriculture is four times more effective than othersectors in reducing poverty. It can even be a gold mine for young entrepreneurs.
Agriculture Sector Role in Economy & Providing
EmploymentE-fasal is endeavouring to create an alternate model of "Factory to
Farm" ( input linkage) and "Farm to Factory" ( output linkage) model
wherein we are building a robust network of agro solution centers ,
called Harit Vyapar KendraThe first-time entrepreneurs in this business are fully supported by the E-FASAL team
to make their business successful. In order to enable the businessman to, facilitate to
getting licenses, give them authorisation for selling products, provide loan facility,
provide minimum two marketing executives, training is given under a systematic
program for new techniques, tools, and expertise.The Certificate Course by E-FASAL Training Institute - Karmasetu is designed to fill the
gap of practical skill requirements of the industry and students for self & job
employmentParticipants are getting placement by acquiring practical skill qualification as per market
demand.
1. Crop based PoP Technical Training
2. Personal Mentor
3. Mock Interview
4. Group Discussion
5. Real Time Projects
6. Computer Training
7. Soft skill development
8. Personality Development
9. Resume Preparation
The placement-oriented training courses are as follows-
Due to this, employment opportunities increase and the salary package becomes
according to other sectors of the market.
Opportunities with
The document summarizes key aspects of the Pradhan Mantri Fasal Bima Yojana (PMFBY) crop insurance scheme launched in India in 2016. Some key points:
- PMFBY aims to provide insurance coverage and financial support to farmers against crop failures from natural calamities at lower premium rates than previous schemes.
- It covers yields losses for notified crops as well as some post-harvest losses. Premium rates are 2% for kharif crops, 1% for rabi crops, and 5% for horticulture.
- The government will bear most of the costs, even up to 90% of the premium. Smart technology will be used to assess claims quickly
This document provides cost data collected from a farmer in Buravilli village, Srikakulam district of Andhra Pradesh. It details the farmer's land holdings, inputs used, costs incurred, production and income from cultivating rice in both kharif and rabi seasons. Various cost concepts - A1, A2, B1, B2, C1, C2 and C3 are calculated based on the data. Income measures like farm business income, owned farm business income, family labour income, net income and farm investment income are also estimated. The analysis shows the farmer incurring most costs on hired labour. Though rice cultivation is profitable, costs on pesticides are high due to pest problems.
For undergraduate agricultural students of the course ‘Ag. Econ. 6.4 Farm Management, Production, and Resource Economics (2+1)’ of Junagadh Agricultural University, Gujarat and other State Agricultural Universities in India.
Contract Farming is a Triangular Benefit - Satheeshkumar.NSatheesh Kumar
Contract farming in Agriculture is a triangular benefit.The beneficiaries are Industry, Farmer and the Government.The detail account of this you can get by going through this presentation uploaded here.Please share your feedback.Thanks.
The document discusses planning and organizing personal selling in rural markets. It defines key terms like planning, organizing, and personal selling. Personal selling involves a seller learning a buyer's wants and satisfying them through a sale. The objectives of personal selling are to find prospects, convert them to customers, and keep them satisfied. Personal selling tasks include order-getting, order-taking, and sales support. In rural markets, personal selling develops long-term client relationships through personalized interactions compared to other marketing tools. It tends to use fewer resources and involve negotiated pricing for complex products requiring after-sale support.
Government run crop yield insurance scheme, procurement at minimum support prices and calamity relief funds are the major instruments being used to protect the Indian farmer from agricultural variability. However, crop insurance covers only about 10% of sown area and suffers from an adverse claims to premium. There are problems with both the design and delivery of crop insurance schemes. These problems could be overcome with rainfall insurance with a well developed rainfall measurement infrastructure. Private and public insurers are currently experimenting with rainfall insurance products. Given the current levels of yield and rainfall variability the actuarially fair premium rates are likely to be high and in many cases unattractive or unaffordable. Instead of adopting the easy and unsustainable route of large subsidies, in the long term the government should consider risk mitigation through improvements in the irrigation and water management infrastructure.
Crop insurance. presentation by gourav kumar vani pptxGourav kumar Vani
The document provides a web link and requests the reader to visit the link to access a presentation. It directs the reader to http://www.gouravkumarvani.co.in/ to get access to an online presentation available at that address. In 3 sentences or less.
Chapter 1 Introduction, Scope and Nature of Agricultural financeGorakh Dhami
This document discusses the meaning, definitions, nature, scope and significance of agricultural finance. It defines agricultural finance as the economic study of farmers borrowing funds and the organizations that lend to agriculture. Agricultural finance can be examined at both the macro and micro level. At the macro level, it deals with total credit needs for the agricultural sector, while at the micro level it focuses on financial management of individual farm businesses. Agricultural finance plays a vital role in agro-socioeconomic development by increasing productivity, farm income, and reducing economic imbalances. It is also important for supporting infrastructure and technology adoption to modernize traditional agriculture.
The document discusses the 3Rs of credit analysis - returns from investment, repayment capacity, and risk bearing ability. It provides details on evaluating each of these factors for determining the credit worthiness of farmer-borrowers. Returns depend on crop selection and management decisions. Repayment capacity is influenced by income, expenses, and other quantitative and qualitative factors. Risk bearing ability considers production, price, and personal risks. Measures to strengthen the 3Rs include adopting new technologies, managing resources and expenses effectively, and increasing farmer equity.
1. Demand forecasting of seed involves anticipating the required seed quantity on the open market by understanding consumer behavior and other factors like total cultivated acreage, seed replacement rates, new varieties introduced, and climate.
2. The production of breeder seed is overseen by ICAR and undertaken by research institutions and state agricultural universities to meet indents collected from seed producing agencies.
3. Foundation seed is produced from breeder seed to meet certification standards and is produced by organizations like NSC, SSC, and state departments of agriculture.
4. Certified seed production involves assessing state-wise demand based on area sown and producing certified seed through state seed corporations, cooperatives, and private seed producers
Agricultural finance deals with the study of credit provision and liquidity services for farm borrowers. It examines the financial intermediaries that provide loan funds to agriculture and how these intermediaries obtain funds. Agricultural finance can be examined at both the macro and micro level. At the macro level, it considers total credit needs and terms for the agricultural sector. At the micro level, it focuses on financial management of individual farm units. Common sources of agricultural finance include money lenders, traders, cooperatives, commercial banks, and microfinance organizations. Loans are classified by time period, purpose, and security. Weaknesses in rural credit systems include a lack of motivation, high interest rates, and poor recovery rates. Suggestions for
Agriculture helps to meet the basic needs of human and their civilization by providing food, clothing,
shelters, medicine and recreation. Hence, agriculture is the most important enterprise in the world.
The livestock insurance scheme provides insurance for small farmers and those dependent on dairy. It covers death or permanent disability of animals from diseases like foot and mouth disease or drought. The premium is 50% subsidized by the central government. It is implemented in 300 districts with Rs. 40 crores allocated in 2011-12, but only 6% of livestock is insured. State livestock boards implement it and select insurance companies. Claims require a veterinary certificate and tagged ear of the insured animal.
This document discusses dry land and farming systems approach (FSA) in India. It begins by noting that about 50% of India's cropped area is rain-fed agriculture due to limited irrigation. Productivity is low on these dry lands due to poor management. It then defines dry land farming as areas receiving less than 750mm of rainfall annually without irrigation. Dry land crops must complete their lifecycle without water. The document contrasts dry land and rain-fed farming and lists characteristics of dry land areas. It describes FSA as a multi-disciplinary approach that views farms holistically to improve production, income, and farmer welfare through sustainable systems. The objectives and methodologies of FSA are outlined, including analyzing existing systems and new options
Secondary agriculture involves processing primary agricultural outputs into finished goods for businesses and domestic use. It can add significant value and invigorate rural and urban economies. The government of India has taken several initiatives to develop secondary agriculture, such as establishing a Technical Advisory Committee on Secondary Agriculture to address constraints and opportunities. The committee proposed $2 billion in investment and analyzed how secondary agriculture could be developed in various sectors. Secondary agriculture is seen as a way to drive primary agriculture growth by establishing linkages between the sectors, diversifying primary outputs, and improving supply chain management.
- National Agriculture Market (NAM) is an electronic trading portal that connects existing agricultural commodity markets (mandis) across India to create a unified national market.
- It aims to reduce transaction costs and information asymmetry by allowing farmers to access real-time price and buyer information as well as sell their produce to a wider national market online.
- For states and their agricultural markets to participate, certain reforms are required such as a single trading license valid nationwide, single point collection of market fees, and the provision for electronic auctions.
This document provides an overview of crop insurance in India, including the various approaches, concepts, types of crop insurance schemes, and the evolution of crop insurance in India. It discusses the National Agricultural Insurance Scheme and its key challenges, as well as the Weather Based Crop Insurance Scheme. It also briefly covers livestock insurance schemes in India.
The document discusses guidelines for bankers to analyze credit applications from farmers in India. It outlines factors to consider like returns from investment, repayment capacity, and risk bearing ability. Repayment capacity depends on gross returns, expenses, consumption, other loans, skills. It also discusses the 5 Cs, 7 Ps, and different repayment plans for loans like lump sum, amortized decreasing/even, and variable plans. The key points are evaluating the viability and risks of proposed investments, a farmer's ability to repay based on their financial situation, and choosing appropriate loan repayment structures.
Kisan Credit Card is a credit card provided by banks to farmers in India to enable them to access affordable credit. Studies have shown Kisan Credit Cards have increased crop yields, farm incomes, and cropping intensity for beneficiary farmers. One study found wheat crop yields increased by 82% and incomes increased by 75% due to access to credit through Kisan Credit Cards. Another study found beneficiary farmers had a higher cropping intensity of 233% compared to 208% for non-beneficiary farmers, and beneficiary farmers allocated more land to commercial crops. Access to credit through Kisan Credit Cards also enables farmers to purchase higher quantities of inputs like seeds, fertilizers and employ more farm labor, thereby increasing productivity and incomes.
India is a nation of youth, based on United Nations data, India’s populationhas crossed 141 crores, there are more than 65% of population below theage of 35 presently in the country.
Agriculture provides employment to 58% workforce of India andcontributes to more than 18% of India’s GDP.
Feeding the people will never face a recession or a slowdown. Economistshave pointed out that agriculture is four times more effective than othersectors in reducing poverty. It can even be a gold mine for young entrepreneurs.
Agriculture Sector Role in Economy & Providing
EmploymentE-fasal is endeavouring to create an alternate model of "Factory to
Farm" ( input linkage) and "Farm to Factory" ( output linkage) model
wherein we are building a robust network of agro solution centers ,
called Harit Vyapar KendraThe first-time entrepreneurs in this business are fully supported by the E-FASAL team
to make their business successful. In order to enable the businessman to, facilitate to
getting licenses, give them authorisation for selling products, provide loan facility,
provide minimum two marketing executives, training is given under a systematic
program for new techniques, tools, and expertise.The Certificate Course by E-FASAL Training Institute - Karmasetu is designed to fill the
gap of practical skill requirements of the industry and students for self & job
employmentParticipants are getting placement by acquiring practical skill qualification as per market
demand.
1. Crop based PoP Technical Training
2. Personal Mentor
3. Mock Interview
4. Group Discussion
5. Real Time Projects
6. Computer Training
7. Soft skill development
8. Personality Development
9. Resume Preparation
The placement-oriented training courses are as follows-
Due to this, employment opportunities increase and the salary package becomes
according to other sectors of the market.
Opportunities with
The document summarizes key aspects of the Pradhan Mantri Fasal Bima Yojana (PMFBY) crop insurance scheme launched in India in 2016. Some key points:
- PMFBY aims to provide insurance coverage and financial support to farmers against crop failures from natural calamities at lower premium rates than previous schemes.
- It covers yields losses for notified crops as well as some post-harvest losses. Premium rates are 2% for kharif crops, 1% for rabi crops, and 5% for horticulture.
- The government will bear most of the costs, even up to 90% of the premium. Smart technology will be used to assess claims quickly
This document provides cost data collected from a farmer in Buravilli village, Srikakulam district of Andhra Pradesh. It details the farmer's land holdings, inputs used, costs incurred, production and income from cultivating rice in both kharif and rabi seasons. Various cost concepts - A1, A2, B1, B2, C1, C2 and C3 are calculated based on the data. Income measures like farm business income, owned farm business income, family labour income, net income and farm investment income are also estimated. The analysis shows the farmer incurring most costs on hired labour. Though rice cultivation is profitable, costs on pesticides are high due to pest problems.
For undergraduate agricultural students of the course ‘Ag. Econ. 6.4 Farm Management, Production, and Resource Economics (2+1)’ of Junagadh Agricultural University, Gujarat and other State Agricultural Universities in India.
Contract Farming is a Triangular Benefit - Satheeshkumar.NSatheesh Kumar
Contract farming in Agriculture is a triangular benefit.The beneficiaries are Industry, Farmer and the Government.The detail account of this you can get by going through this presentation uploaded here.Please share your feedback.Thanks.
The document discusses planning and organizing personal selling in rural markets. It defines key terms like planning, organizing, and personal selling. Personal selling involves a seller learning a buyer's wants and satisfying them through a sale. The objectives of personal selling are to find prospects, convert them to customers, and keep them satisfied. Personal selling tasks include order-getting, order-taking, and sales support. In rural markets, personal selling develops long-term client relationships through personalized interactions compared to other marketing tools. It tends to use fewer resources and involve negotiated pricing for complex products requiring after-sale support.
Government run crop yield insurance scheme, procurement at minimum support prices and calamity relief funds are the major instruments being used to protect the Indian farmer from agricultural variability. However, crop insurance covers only about 10% of sown area and suffers from an adverse claims to premium. There are problems with both the design and delivery of crop insurance schemes. These problems could be overcome with rainfall insurance with a well developed rainfall measurement infrastructure. Private and public insurers are currently experimenting with rainfall insurance products. Given the current levels of yield and rainfall variability the actuarially fair premium rates are likely to be high and in many cases unattractive or unaffordable. Instead of adopting the easy and unsustainable route of large subsidies, in the long term the government should consider risk mitigation through improvements in the irrigation and water management infrastructure.
Crop insurance. presentation by gourav kumar vani pptxGourav kumar Vani
The document provides a web link and requests the reader to visit the link to access a presentation. It directs the reader to http://www.gouravkumarvani.co.in/ to get access to an online presentation available at that address. In 3 sentences or less.
by Pramod Aggarwal, CGIAR Program on Climate Change, Agriculture, and Food Security. Presented at seminar on Insuring the future of farmers under climate change. London, UK. 28 January 2015. Learn more: http://ccafs.cgiar.org/weather-index-based-insurance
Weather Risk Services is a global risk management company that provides innovative insurance and information services using data, technology, and automation. It has over 100 employees operating across India and globally. The document outlines Weather Risk Services' vision, clients, impact, and proposals for developing customized weather and crop insurance programs through a three phase approach of planning, piloting, and scaling up.
Crop insurance aims to mitigate financial losses suffered by farmers due to damage or destruction of crops from various risks like weather fluctuations. It provides insurance coverage and financial support to farmers in the event of failed crops. The objectives are to encourage progressive farming practices and stabilize farm incomes. Crop insurance can avoid losses from unpreventable causes like weather, pests, and market prices. It benefits farmers through increased repayment capacity and avoiding risk of non-payment. It also benefits banks and reduces government relief payments. Leading technology like the AIR Multi-peril Crop Loss Model provides a scientific approach for analyzing and pricing crop insurance programs.
1. The document discusses weather-based crop insurance and describes various risks faced by farmers like droughts and floods. It also discusses different formal and informal risk management strategies.
2. Formal insurance programs are described, including a weather index insurance product offered by ICICI Lombard and BASIX to insure farmers against deficient rainfall. The program divides the monsoon season into growth phases and provides payouts if rainfall is below a trigger level.
3. Challenges in developing weather index insurance are also outlined, such as basis risk. But the product is seen as well-suited for catastrophe risks with simple design and low costs.
- Droughts have severely impacted Bihar's economy and agriculture over the past decade. The period from 2009-2013 was the driest in over 100 years for the state.
- 38 of Bihar's districts experienced drought conditions in multiple years during this period, with 5 districts facing drought every year from 2009-2013.
- Low rainfall led to significant reductions in paddy output and yields. Paddy production, area, and yields were 318 kg, 7,751 hectares, and 94,398 hectares lower, respectively, in drought years compared to normal rainfall years.
- Drought wiped out economic gains from prior rapid growth in Bihar. Over 10 million people were pushed below the poverty line after
This document discusses agricultural insurance in India, including its evolution, performance of different schemes, and issues faced. It provides the following key points:
1) Crop insurance schemes in India have evolved from rainfall insurance in the 1920s to current national schemes that use area-yield indexes or weather indexes.
2) Yield-based schemes like NAIS insured large areas but had low claims ratios and farmer benefits. Weather index schemes have higher claims ratios but issues with basis risk remain.
3) Low insurance penetration is due to factors like farmers' low willingness to pay, lack of suitable products, and incomplete understanding of insurance purposes.
4) A comprehensive revenue assurance or income protection plan that stabilizes total farm income
This document discusses weather index crop insurance provided by Sanasa Insurance Company in Sri Lanka. [1] It provides payouts to farmers when weather indices like rainfall fall outside predetermined thresholds. [2] Sanasa first offered this insurance in 2010 and has since expanded coverage. [3] While it reduces issues like delays and human errors in claims, scaling it up faces challenges like the costs of implementation and lack of reliable weather data in all areas.
This document discusses soil quality and fertility as the most important factors in crop production. It explains that soil determines which crops yield best and the economic return a landowner can expect. The document covers soil profiles, texture, structure, composition, pH, essential nutrients, and how to determine soil reserves and nutrient needs to establish fertilization goals. Key factors like drainage, organic matter and limiting layers are addressed.
Presented by Eyob Meherette (NISCO) at the Workshop on Developing Index-Based Livestock Insurance to Reduce Vulnerability due to Drought-related Livestock Deaths, ILRI, Addis Ababa, Ethiopia, 12 July 2010.
Weather insurance in India - A snaphot (2010)Outenga
This document discusses lessons learned from scaling crop weather index insurance programs in India. It addresses key challenges such as basis risk from imperfect relationships between indices and losses. It suggests using yield-tailored meteorological indices designed through regression of weather patterns on crop yields to better match farmer risks. The document also covers pricing approaches, factors that influence premium rates, and obstacles to insurance acceptability and sellability that must be addressed, such as complex models, trust issues, and service quality. Overall, the summary highlights lessons for improving the design and delivery of crop insurance programs through weather indices.
This document discusses using smartphone pictures for crop insurance in India. Farmers would take regular pictures of their fields using a simple app and submit them online. Experts would use machine learning to analyze the pictures and assess damage, providing lower basis risk than satellite data alone. The approach could complement index insurance and provide agro-advisory services. An initial pilot with 750 farmers in Punjab and Haryana is testing picture quality, farmer engagement, and predicting damage from pictures. While this has potential advantages like lower costs, the main risk is moral hazard from farmers manipulating damage assessments from their photos. Further testing is needed to limit this risk.
Farmer suicides have been a major issue in India since the 1990s. The document discusses the key causes of farmer suicides as monsoon failure, high debt, crop failure, lack of irrigation, declining prices of crops coupled with increasing input costs, and poverty. It provides statistics showing that states like Maharashtra and Kerala have seen thousands of farmer suicides annually, with debt being a factor in over 80% of cases and average debt levels of Rs. 50,000. Suggested solutions include more crop insurance, profitable prices for farmers, increased access to credit, and support for inputs.
Central excise duty is payable on goods before they are removed from the place of manufacture based on the assessable value determined by a central excise officer. The central excise act of 1944 and tariff act of 1985 along with rules issued by the central government and its notifications are the sources of central excise law. Goods covered under central excise include alcoholic liquors, opium, narcotic drugs, and other manufactured or produced goods except those exempted. There are two schedules under central excise - Schedule I covers duties determined on an ad valorem basis according to the tariff, while Schedule II covers specific uniform rates of 8% and 16%.
This document summarizes a study on rural finance in India. It discusses the presence of various financial institutions in rural areas, including nationalized banks, cooperative banks, microfinance institutions, and informal sources of finance like moneylenders. It also outlines some of the key challenges in rural financing such as high transaction costs, lack of collateral, and information asymmetries. The document then discusses various enabling measures to expand rural finance, including the growing application of technologies like mobile phones, ATMs, and smart cards. It provides case studies on the use of technologies by banks and on the strategies adopted by microfinance institutions to expand outreach in rural areas.
Microinsurance provides insurance protection to low-income individuals in India against risks such as death, illness, asset damage, and natural disasters. It began in India through non-profit organizations and hospitals but has expanded due to regulations requiring insurers to offer rural and social policies. While uptake is still limited, the potential market size is large as 90% of Indians lack insurance. Common microinsurance products in India include life, health, property, crop and disaster policies. These are offered through various models including partner-agent, full-service, provider-driven and community-based. Recently, IRDA proposed expanding microinsurance by allowing more agent types and diversifying products with savings and health features to better serve low-income communities.
BASIX is a microfinance institution established in 1996 in India with a mission to promote sustainable livelihoods for rural poor and women through financial services and technical assistance. It has expanded its services over time to include micro-insurance, agriculture and livelihood services, energy/environment programs, and vocational training. BASIX partners with insurance companies to provide weather index insurance to farmers since 2003, starting with small pilots and expanding coverage over time, with over 34,000 farmers covered as of 2009. Challenges include the voluntary nature of the insurance, availability of weather data, high marketing costs for small products, and lack of customer awareness.
Agriculture production and farm incomes in India are frequently affected by natural disasters like flood, drought and earthquake etc.
Agricultural insurance is considered an important mechanism to effectively address the risk to output and income resulting from various natural and manmade events.
Micro insurance in Indian perspective (By Ashish Sartape)Ashish Sartape
- 90% of Indians lack insurance coverage, highlighting the importance of microinsurance.
- Microinsurance began in India in the 19th century and was nationalized in 1956 before being liberalized in the 1990s.
- Microinsurance is defined as low-cost insurance for low-income individuals and covers products like health, life, crops and livestock.
- Major providers of microinsurance in India include LIC, ICICI Prudential and HDFC Standard.
Agriculture is a main stay of Indian economy. About fifty percent population of India is dependent upon agriculture sector for their sustenance notwithstanding its reduced share in GDP of India. Agricultural production is frequently affected by natural disasters like floods, earthquake, drought, cyclone etc. these events severely affect the income of the farmers through loss in agricultural production as these events are beyond the control of farmers. With the commercialization of agriculture, magnitude of loss due to these events is increasing. The important strategy which can effectively address the risk to output and farm income is agriculture insurance. Since independence the various agriculture insurance schemes have been introduced in the country. The main objective of this paper is to examine the growth and performance of agriculture insurance in India. The farmers who have insured their crops during the rabi season were 78362063 and during kharif season were 192794173 from 1999 00 to 2015 16 under the NAIS. Dr. Manisha | Harpreet Kaur "Crop Insurance Schemes in India: A Glance" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-3 | Issue-5 , August 2019, URL: https://www.ijtsrd.com/papers/ijtsrd25354.pdfPaper URL: https://www.ijtsrd.com/humanities-and-the-arts/economics/25354/crop-insurance-schemes-in-india-a-glance/dr-manisha
Crop Insurance, the Backbone of Indian farming communityIssues and ChallengesIJERA Editor
The document discusses issues and challenges with crop insurance in India. It provides background on crop insurance programs in India, including the large government program that loses vast sums each year and more commercially viable insurance offered by private companies. Key issues discussed include the difficulties in insuring crop losses due to spatially correlated risks, problems with existing area-based and weather-based insurance programs including lack of transparency and viability, and lack of farmer interest due to lack of understanding of insurance and lack of customized products. The document examines crop insurance scenarios in various Indian states including Odisha.
This document discusses crop insurance in India. It outlines several challenges facing Indian agriculture like small land holdings, soil exhaustion, drought vulnerability, and issues with minimum support prices. To address risk, the government offers various crop insurance options like yield index insurance and weather index insurance. India has had a publicly administered crop insurance scheme since 1972, but all variants introduced had flaws and incurred losses. The latest initiative is Pradhan Mantri Fasal Bima Yojna launched in 2016 to incorporate the best features of previous schemes and remove weaknesses in an effort to alleviate farmer distress.
Law and Agriculture PPT- SHIVANI SINGH(128).pptx85Topper
Agricultural insurance provides protection to farmers against losses from crop failures caused by natural disasters and other events beyond their control. India has implemented several agricultural insurance schemes over the years to address this issue, with varying degrees of success. The current flagship scheme is Pradhan Mantri Fasal Bima Yojana (PMFBY), launched in 2016, which aims to reduce farmers' insurance premium burden and ensure timely settlement of claims. However, past schemes faced issues and left many farmers uninsured, so further improvements may be needed to achieve wide coverage of farmers across India.
FINANCIAL PERFORMANCE ANALYSIS ON AGRICULTURE INSURANCE COMPANY OF INDIA LIMI...Karteek Chedadeepu
The document analyzes the financial performance of Agriculture Insurance Company of India Limited from 2009-2015. Some key findings:
- Gross direct premium growth rate increased in 2011 but decreased significantly in 2015.
- Net retention ratio decreased over the years, dropping below 50% in 2011-2012 but increasing again to over 50% in later years.
- Expenses of management as a ratio of gross direct premium increased each year peaking in 2014-2015.
- Underwriting balance was positive from 2010-2011 to 2012-2013 but nearly broke even in 2013-2014 and was negative in 2014-2015.
So while some metrics like net retention ratio and underwriting balance fluctuated over time, expenses
This document summarizes a research paper on microinsurance in India. It begins by defining microinsurance as insurance for low-income individuals involving modest premiums and benefits. It then discusses the development of microinsurance in India, noting that some programs were started by NGOs and more have emerged due to microfinance activity and regulations requiring insurance companies to serve rural and social sectors. Key points covered include IRDA's 2005 microinsurance regulations, the definition of rural and social sectors, and insurance companies' strategies of partnering with civil society organizations to reach the poor. Supply of microinsurance products is also summarized, finding that most cover life or accident risks with limited health coverage and contract durations of 3-20 years.
This document provides an overview of crop insurance initiatives in India. It discusses various crop insurance schemes introduced since the 1970s such as the Pilot Crop Insurance Scheme (PCIS), Comprehensive Crop Insurance Scheme (CCIS), National Agricultural Insurance Scheme (NAIS), Modified NAIS (MNAIS), Weather Based Crop Insurance Scheme (WBCIS) and Pradhan Mantri Fasal Bima Yojana (PMFBY). Key features of these schemes such as area approach, risk coverage, premium rates and subsidies are explained. Case studies demonstrating the benefits of insurance for farmers are also presented. The document emphasizes using technology like drones and satellites to improve crop insurance implementation and monitoring.
Microinsurance provides affordable insurance policies to low-income and vulnerable populations in India. It is regulated by IRDAI and policies have a maximum sum assured of Rs. 50,000. There are general microinsurance policies that cover health, accidents, and property, as well as life microinsurance policies that are term or endowment plans. Microinsurance gives these populations an opportunity to manage financial risks from events like illness, death, or property damage. It can help safeguard their savings and provide security. However, microinsurance is still nascent in India and faces challenges in reaching rural populations and ensuring proper management of pooled resources and claims processing.
Webinar on Bundling agriculture index insurance with financial and non financ...Impact Insurance Facility
Bundling index insurance with other financial and non-financial services can help scale agricultural insurance. It provides incentives for farmers to purchase insurance and opportunities for other stakeholders. Index insurance has been successfully bundled with credit in places like Mali, increasing farmer investment and incomes. Insurers like ACRE bundle products with farmer groups, banks, and input suppliers. Appropriate services to bundle with include credit, seeds/fertilizers, and complementary insurance covers. Key considerations for effective bundling include pricing affordability, evaluating value for all stakeholders, and delivering bundled products that protect farmer incomes.
Crop insurance provides protection to farmers against losses from unexpected crop failures. It helps compensate for losses that could otherwise cause financial ruin. There are several types of crop insurance that farmers can purchase, including MPCI, APH, GRP, and CRC policies, which protect against losses from various weather events and price drops. Crop insurance plays an important role in Indian agriculture by reducing risks, compensating for losses, improving financial stability, and promoting rural development. However, there are also challenges to its adoption like lack of awareness, difficulties with claims, and lack of access in remote areas. Measures like subsidies, effective settlement procedures, and farmer education can help address these issues.
This document describes a proposed microinsurance medical product for Jubilee Insurance Company of Kenya. It provides specifications for the product, including an inpatient cover for families with a general limit of 200,000 KES. Premiums would be 1,800 KES per member annually. The target market is low income Kenyans with credit facilities. Actuarial pricing techniques are used to estimate premiums, drawing on available data sources and adjusting assumptions to reflect the community characteristics. The premiums estimated using standard techniques are intended to be comparable to practical rates.
Insurance is one of the emerging concepts in the recent period which involves huge investments in
Socio economic developments. The term "Micro insurance" first appeared as a new financial
service within microfinance and then developed into a sector of its own. Hence this paper discusses
the concepts of micro insurance in general.
Insurance is one of the emerging concepts in the recent period which involves huge investments in
Socio economic developments. The term "Micro insurance" first appeared as a new financial
service within microfinance and then developed into a sector of its own. Hence this paper discusses
the concepts of micro insurance in general.
ICICI Prudential Life Insurance is the 2nd largest life insurance company in India with a customer base of 4 million and total assets exceeding Rs. 100,000 crore. The insurance sector provides greater opportunities after liberalization with several global players emerging. Life insurance premium in India is projected to grow significantly from 1998-99 to 2009-10, indicating enormous potential for growth in the life insurance sector.
Insurance: Concept, Mechanism and effectiveness in agriculture and livestock ...mahesh timilsina
This slideshare is about the study of Insurance: COncept, Mechanism and effectiveness in agriculture and livestock in Nepal. It has included the insurance scheme adopted in Nepal as per the Directive launched by Nepal Government in January 2013.
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
karnataka housing board schemes . all schemesnarinav14
The Karnataka government, along with the central government’s Pradhan Mantri Awas Yojana (PMAY), offers various housing schemes to cater to the diverse needs of citizens across the state. This article provides a comprehensive overview of the major housing schemes available in the Karnataka housing board for both urban and rural areas in 2024.
Presentation by Julie Topoleski, CBO’s Director of Labor, Income Security, and Long-Term Analysis, at the 16th Annual Meeting of the OECD Working Party of Parliamentary Budget Officials and Independent Fiscal Institutions.
Presentation by Rebecca Sachs and Joshua Varcie, analysts in CBO’s Health Analysis Division, at the 13th Annual Conference of the American Society of Health Economists.
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
The Power of Community Newsletters: A Case Study from Wolverton and Greenleys...Scribe
YOU WILL DISCOVER:
The engaging history and evolution of Wolverton and Greenleys Town Council's newsletter
Strategies for producing a successful community newsletter and generating income through advertising
The decision-making process behind moving newsletter design from in-house to outsourcing and its impacts
Dive into the success story of Wolverton and Greenleys Town Council's newsletter in this insightful webinar. Hear from Mandy Shipp and Jemma English about the newsletter's journey from its inception to becoming a vital part of their community's communication, including its history, production process, and revenue generation through advertising. Discover the reasons behind outsourcing its design and the benefits this brought. Ideal for anyone involved in community engagement or interested in starting their own newsletter.
How To Cultivate Community Affinity Throughout The Generosity JourneyAggregage
This session will dive into how to create rich generosity experiences that foster long-lasting relationships. You’ll walk away with actionable insights to redefine how you engage with your supporters — emphasizing trust, engagement, and community!
Indira awas yojana housing scheme renamed as PMAYnarinav14
Indira Awas Yojana (IAY) played a significant role in addressing rural housing needs in India. It emerged as a comprehensive program for affordable housing solutions in rural areas, predating the government’s broader focus on mass housing initiatives.
Bharat Mata - History of Indian culture.pdfBharat Mata
Bharat Mata Channel is an initiative towards keeping the culture of this country alive. Our effort is to spread the knowledge of Indian history, culture, religion and Vedas to the masses.
1. By Deepa Venkatraman
This study looks at the genesis of agricultural insurance in India, examines various
agricultural insurance schemes launched in the country from time to time and the coverage
provided by them. Major issues and problems faced in implementing agricultural insurance
in the country are discussed in detail.
M I R M X V I – M I B s c h o o l o f M a n a g e m e n t
Agriculture Insurance in India
Challenges and Opportunities
2. 2
Table of contents
INTRODUCTION........................................................................................................................................................3
OBJECTIVES OF THE STUDY:.....................................................................................................................................3
ANALYSIS OF AGRICULTURE INSURANCE IN INDIA.............................................................................4
OVERVIEW ...................................................................................................................................................................4
HISTORICAL BACKGROUND ON VARIOUS INSURANCE SCHEMES IMPLEMENTED IN INDIA...........................5
CHALLENGES RELATED TO AGRICULTURE INSURANCE IMPLEMENTATION IN INDIA....................................8
OPPORTUNITIES.......................................................................................................................................................10
REFERENCES............................................................................................................................................................12
APPENDIX.................................................................................................................................................................13
3. Introduction
Historically, Agriculture has been the backbone of Indian economy. Agriculture is the primary
source of livelihood for more than 55% of Indian population. This automatically implies that risk
management in Agriculture sector is one of the key focus areas for the current NDA government
in India.
Unfortunately, Agriculture production output as well as farmer’s income in India is frequently
affected by natural disasters such as droughts, floods, storms, cyclone, earthquake etc. The result
is further compounded by the outbreak of epidemics and man-made disasters such as fire, sale of
spurious seeds, fertilizers and pesticides, price crashes,etc. There have been constant efforts
made towards managing risks across the Agriculture value chain but little progress or result
accomplished till date. Although, recent mechanisms like contract farming and derivatives
markets in futures have been established which are expected to bring down some of the volatility
in prices directly or indirectly but agricultural insurance is still considered as a critical risk
management mechanism to effectively manage risks to output and income resulting from various
natural and manmade disasters.
“Agriculture Insurance is considered as a special line of property insurance applied to
Agriculture firms. Agriculture insurance is not limited to crop insurance; it also applies to
livestock, bloodstock, forestry, aquaculture, and greenhouse. Crop insurance is the most
developed sub-line of business of agricultural insurance, accounting for almost 90 percent of the
total premium written worldwide.” (As stated by Ramiro Iturrioz 2009)
Figure 1: Agriculture Insurance Premiums Worldwide
Objectives of the Study:
In this paper, we will primarily focus on Crop Insurance sub-line with a geographical focus on
India. The main objective to prepare this report is to:
I. Understand basic concepts on Agriculture Insurance in India
4. 4
II. Provide a brief historical background on various insurance schemes implemented by the
government over a period of time and the recent modifications to the programs or
schemes
III. Discuss challenges related to Agriculture Insurance schemes,a quick look at farmers
perception in India about Agriculture Insurance and other on-ground issues
IV. Try and explore prospects and suggest some possible recommendations
Analysis of Agriculture Insurance in India
Overview
The risk appetite of an average Indian farmer is very limited. Large farm households or wealthy
farmers are able to diversify risks over time and manage their production or income in an
appropriate manner. Although, severalstudies in this field indicate that the risk strategies or
diffusion mechanisms managed by farmers themselves come at a hefty price hence becomes
unaffordable by any of the average farmers. Individuals especially farmers are helpless and have
no control over the occurrence or impact of a natural event.
Crop Insurance is unique from other insurances because the incidence of crop risk is not
independently or randomly distributed among the insured. Naturaldisasters typically affect the
entire population in the area. Crop risk is distributed across space and time. The losses suffered
by farmers in a particular locality will kick in the mutuality effect by farmers from other areas
bearing the loss or the premium reserves can be used to pay the indemnities. This shows that a
good crop insurance scheme will consider mutuality benefit. Farmers receive protection and
stability of their income via crop insurance. Crop insurance should facilitate adoption of modern
technologies, encourage higher investment that results in increased agriculture output. Crop credit
insurance also reduces the risk of farmer’s defaults on loans. The reimbursement of indemnities
in the case of crop failure facilitates the farmer to repay his loan in time and thus, his credit line
with the formal financial institutions is maintained intact preventing institutional credit defaults.
The other key benefit from various insurance schemes is the indemnification of such risk-averse
individuals who are adversely affected by natural probabilistic phenomenon. When Insurance
offers the possibility of transferring risks, it allows insured to engage in risky activities, which
otherwise they would not pursue.
Some of the biggest drawbacks of this insurance in India is lack of historical data on yield levels
as well as risk position of individual small-scale farmers puts the insurance company in a tight
spot. The good news is a lot of work is going on into data collection and analysis in the recent
years. As in the case of general insurance, agricultural insurance market also faces the problem of
adverse selection and moral hazard. The higher premium rates due to high operational and
specialized skills requirement, discourage majority participation and only high-risk clients
participate leading to adverse selection. Tendency of moral hazard tempts an insured to not invest
in loss prevention techniques than an uninsured counterpart when expected unless placed as a pre-
requisite by the insurer. They end up not using certain expensive fertilizers or pesticides, use low
quality seeds etc Private insurance companies cannot limit their losses due to all of the above
drawbacks leading such agencies in crop insurance market towards bankruptcy.
As we can see, Agriculture Insurance is a profound area and is governed by complex biological
5. 5
processes that require very skilled underwriters; who can understand all of these many variables
and establish link between a loss that is insurable and the cause of loss. With the increasing
modernization of this sector due to introduction of modern and sophisticated technologies,
underwriters need to have the right balance in understanding the biological, traditional (wherever
applicable in Indian sub-regions) and advanced technical process to not only assess premiums but
also advise on improvements of the producers own risk management practices.
Agricultural insurance products
Agricultural insurance products can be classified into three main groups based on the method of
determining how claims are calculated. These classifications are summarized in table 1 below.
Note: A comparative study on various parameters between yield and crop insurance is provided in
Appendix: Table 1. (S.S. Raju and Ramesh Chand, 2009)
Historical background on various Insurance Schemes implemented in India
I. First Individual Approach Scheme 1972-1978
General Insurance Corporation (GIC) of India introduced the first scheme based on
“Individual approach” - Crop Insurance Scheme on cotton and later included groundnut,
wheat and potato. The Scheme was implemented in 6 states and continued up to 1979. This
scheme covered 3000+ farmers only for a premium of approximately Rs.4.5 lakh against
6. 6
claims of Rs.37 lakhs. (S.S. Raju and Ramesh Chand,2009)
II. Pilot Crop Insurance Scheme (PCIS) 1979-1984
“The Pilot Crop Insurance Scheme was launched by the GIC in 1979, which was based on
the ‘Area Approach’ for providing insurance cover against a deficit in crop yield below the
threshold level. The Scheme covered cereals,millets, oilseeds, cotton, potato and chickpea
and it was confined to loanee farmers of institutional sources on a voluntary basis. The
PCIS 1979 was implemented in 12 states till 1984-85 and covered 6.23 lakh farmers for a
premium of Rs.195.01 lakh against claims of Rs.155.68 lakh during the entire period. The
premium paid was shared between the GeneralInsurance Corporation of India and State
Governments in the ratio of 2:1. The maximum sum insured was 100 per cent of the crop
loan, which was later increased to 150 per cent. The Insurance premium ranged from 5 to
10 per cent of the sum insured. Premium charges payable by small / marginal farmers were
subsidized by 50 per cent shared equally between the state and central governments.”
(Source: S.S.Raju and Ramesh Chand, 2009)
Some of the major drawbacks of this scheme were as follows:
o This scheme was linked to only loaned farmers. Small-scale farmers were unable
to participate in this scheme since they have poor access to institutional credit.
o The unit of insurance was huge.
o There was very little awareness among the farmers about the crop insurance
scheme.
o Critical commercial crops like cotton and sugarcane were not part of this scheme
III. Comprehensive Crop Insurance Scheme (CCIS) 1985-99
The Comprehensive Crop Insurance Scheme (CCIS) launched in 1985 was the first nation-
wide Scheme since all of the previous schemes were pilot projects restricted to a small
scope of farmers scattered across states. This scheme was linked to short-term credit and
was based on the ‘homogenous area approach’. The Indian Government introduced CCIS
during the year 1985-86. By 1999, the scheme was adopted by 15 states and 2 union
territories (UTs). Both, PCIS and CCIS were confined only to farmers who had borrowed
seasonalagricultural loans from financial institutions. The main difference between PCIS
and CCIS was that PCIS was on voluntary basis while CCIS was compulsory for loanee
farmers. The CCIS covered 763 lakh farmers for a premium of Rs.404 crore against claims
of Rs.2303 crore.
Important features of this scheme were:
o Farmers who had availed bank loans were required to be covered and growing food
crops and oilseeds. The coverage was restricted to 100 per cent of the crop loan subject
to a maximum of Rs.10,000/- per farmer.
o The premium rates were:2 % for cereals, millets , 1% for pulses and oilseeds.
Farmers‟ share of premium was collected at the time of disbursement of loan. Half of
the premium payable by small and marginal farmers was subsidized and split between
the Centraland State Governments.
o The Premium and Claims were shared by Centraland State Governments in a 2:1 ratio
o The scheme was a multi agency effort, involving GOI, State Governments, Banking
Institutions and GIC. (S.S. Raju and Ramesh Chand, 2009)
The major drawbacks for this scheme were that it was based on “homogenous Area
approach” with coverage restricted to loanee farmers,uniform premium rate for all the
farmers and regions, coverage of few crops and time lag for indemnity payment. (Jain,
7. 7
2004)
IV. National Agriculture Insurance Scheme (NAIS)
The National Agricultural Insurance Scheme (NAIS),intended to expand coverage of
farmers and types of crops, was introduced in the country from Rabi 1999-2000 replacing
Comprehensive Crop Insurance Scheme (CCIS). This scheme which was implemented by
AIC- Agriculture Insurance Company of India Ltd. mainly focused on addressing loss
coverage against crops damage due to natural calamities like drought, flood, hailstorm,
cyclone, pests and diseases. The other positive aspect of this scheme was it was made
available to all formers irrespective of their size of debt (loanee or non-loanee) and covered
following food crops (cereals,millets and pulses), oilseeds and annual
commercial/horticultural crops, in respect of which past yield data is available for adequate
number of years. “The Scheme was continued till 2013, however, some States are allowed
to implement NAIS during Rabi 2013-14. Since the inception of the Scheme 2084.78 lakh
farmers for a premium of Rs.8,67,121 lakh against the claim of Rs.25,37,558 lakh were
covered until 2012-13. The total area insured was Rs.3137.70 lakh hectares during the
same period. This was supposed to be a more comprehensive Scheme, with aim to cover all
farmers irrespective of loanee or non-loanee.” (S.S. Raju and Ramesh Chand, 2009)
The State-wise coverage details of under “National Agricultural Insurance Scheme” is
available at Annexure-I
V. Modified National Agriculture Insurance Scheme (MNAIS)
Modified National Agricultural Insurance Scheme (MNAIS) was an improvised farmer
friendly scheme,which was implemented on a pilot basis in 50 districts between Rabi
2010-11 in comparison to the earlier scheme which was implemented only in 25 States and
2 Union Territories. During the Five seasons of its implementation in 17 States, the
MNAIS covered 45.80 lakh farmers for a premium of Rs.1,08,800 lakh against the claim of
Rs.86,400 lakh until Rabi 2012-13. The total area insured was 46.79 lakh hectares during
the same period. (S.S. Raju and Ramesh Chand, 2009)
Note: The State-wise coverage detail under “Modified National Agricultural Insurance
Scheme” is available at Annexure-II, Table-A.
VI. Pilot Weather BasedCrop Insurance Scheme (WBCIS)
During the year 2003-04 the private sector came out with some insurance products
in agriculture linked to weather indices. The insurance losses due to vagaries of
weather, i.e. excess or deficit rainfall, aberrations in sunshine, temperature and
humidity, etc. could be covered on the basis of weather index. If the actual index of
a specific weather event is less than the threshold, the claim becomes payable as a
percentage of deviation of actual index. For ex: Rainfall Insurance was a product
released by ICICI-Lombard General Insurance Company. This type of insurance
scheme has the advantage to settle the claims within shortest possible time. The WBCIS is
based on actuarial rates of premium but to make the Scheme attractive, premium actually
charged from farmers has been restricted at par with NAIS.
8. 8
Note: The State-wise coverage detail under pilot WBCIS scheme is available at Annexure-
II Table-B. (S.S. Raju and Ramesh Chand, 2009)
VII. National Crop Insurance Program (NCIP)
This is the latest scheme introduced b the government in 2013-2014 and was a merger of
all of the existing MNAIS, WBCIS and CPIS programs with enhancements to help further
expand this scheme throughout the country.
Challenges related to Agriculture Insurance Implementation in India
Before we proceed with the concrete problems within the Agri-Insurance itself it is
important to understand the socio-economic characteristics of farmers in India. Indian farmers are
not very educated; it is more of their lineage, tradition and experience that have made them the
experts in this field. Many farmers in India are not even aware of existence of Insurance and
others who do, perceive it in many different ways very different from other countries globally.
When a field survey was conducted to understand socio-economic differences (refer Appendix:
table 2) between loanee and non-loanee farmers,it was observed that there were no significant
difference between their education level and family. However,farm size and crop income, were
the biggest differentiators with the borrowers having a higher value in both of these parameters.
Non-loanee farmers had higher secondary sources of Income. Though average income of
borrower household was much higher than non borrower’s but the difference was only upto 10%.
Feedback from loanee farmers were very positive on agriculture insurance since it was
compulsory for them to take insurance due to bank loans they had shown satisfaction on various
insurance schemes. Some of the improvements suggested were some reduction on premium rates,
inclusion of more food crops and a quicker time desired for claims settlement. When asked on
their inputs on a more effective way to spread awareness to other farmers,the most common
suggestion of source was village melas. (Mela: a fun-n- fair set up in their respective villages
periodically). Non-loanee farmers, the biggest issue why they didn’t take up insurance was
primarily due to lack of awareness. When asked about their financial back-up during bad days or
crop failure they mentioned that they would usually tap into help from family and friends or
hypothecation of jewelry, livestock and assets. Over 3000 farmers committed suicides in the last
3 years. The suicide rate among Indian farmers has risen to 47% higher than the national average.
Hence there is something not working right with all these schemes or other risk mechanisms used
today in the agriculture value chain.
Key issues:
1. Insured area (unit of insurance) too large along with unreliability or unavailability of
historical data
As of now, the National Agricultural Insurance Scheme is implemented on the basis of
"homogeneous area"approach, and unit of insurance is equal to the Mandal / Taluk or
equivalent unit, in most cases. These are large units of insurance covering diverse villages,
which have huge variations due to administrational differences and actual yield that are
impacted due to natural calamities. Hence for the scheme to be more reliable and popular the
unit of insurance should be reduced to the level of “village‟ or a cluster of similar villages
(Panchayats). Ideally, "Individual approach" would reflect crop losses on a realistic basis, and
has been regarded most desirable (Dandekar, 1985). However,implementing a crop insurance
scheme at the "individual farm unit level" is beset with problems that not only adds to the
9. 9
administrative, operational and financial constraints but also many others as stated below:
o Non-availability of the past records of land surveys, ownerships, tenancy and yields
at individual farm level
o Small size of farm holdings and inaccessibility of some farm-holdings
o A large variety of crops, varied agro-climatic conditions, diverse practices and
inadequate infrastructure.
There can be a more realistic yield loss risk assessment if the insurance unit is reduced to the
Gram Panchayat (GP) level, however, data being the lifeline of insurance, the actuarial rating
of the product at GP level would be possible only if the historical yield data at that level (GP)
is available for a reasonably long period. In reality, such data at the GP level is not available
and therefore challenges the insurer to work out premium rates on sound actuarial principles
(Planning Commission, 2007).
2. Threshold / guaranteed yield assessment
Presently, Guaranteed Yield, based on which indemnities are calculated, level of indemnity
multiplied by the moving average yield based on last 3 years of historical data for rice and wheat,
and past 5 years for other crops. This calculation doesn’t provide adequate data or protection to
farmers especially in areas with consecutive adverse seasonal hits, pulling down the average
yield. Hence Indian council of Agriculture research proposed to consider the best 5 out of the
preceding 10-years yield.
3. Settlement ofClaims – untimely or never settled
Indian government requires Crop cutting experiment is a crucial step required to assess claims
payout and release of funds from central and state governments. These assessments can be done
only post crop harvest time. The problem is there is a huge time lag of atleast more than 8 months
between the time loss occurred to actual claim payment.
4. Premium rates too high and no responsibility ofbanks today in sharing % of premiums
Considering the overall benefits of Crop Insurance and its indirect protection to lending activities,
it is only justified for banks to share the burden of high premium rates in such instances.
Currently when a claim is settled the bank first settles its respective dues against the farmers and
then passes on anything if remaining to the farmers. It is only justified that atleast a small % of
premium rates are also shared by the banks along with the governments so as to reduce the
burden of price to farmers.
5. Lack ofawareness of crop insurance amongst farmers
Majority of the farmers are not even aware of Agriculture insurance. They need to understand
how Insurance can not only protect their production but also income during bad seasonal rain or
natural disasters. There has to be more than 1 media of advertisement and marketing to reach out
to this rural population of India in a creative manner like village melas, local farmer committees,
roadshows, television etc
6. Lack ofappropriate forums or risk advisory mechanisms to prevent or control loss for
farmers
There are no formal forums, committees or advisory medium to reach out to the farmers to
provide their subject matter expertise by assessing their current life cycle and introduce various
mechanisms, methodologies and practices to reduce risks by managing losses that could have
been either prevented or controlled by use of modern technologies or innovative methods.
Recently there has been many farmers within states coming together to small forums and sharing
their know-hows and success factors to help spread knowledge and awareness regarding various
10. 10
ways to control crop damages in a cost effective manner. This system should be more researched
and formalized so as to benefit a larger farmer base across the nation.
7. Lack ofadequate public-private partnership
There are a lot of private players in this insurance arena like Reliance, Tata-AIG,Royal
Sundaram, IFFCO-Tokio, Bajaj-Allianze, ICICI-Lombard, HDFC-Chubb etc but with little actual
contribution or participation in this sector of crop insurance. The Insurance Regulatory and
Development Authority (IRDA) has stipulated that “every new insurer undertaking general
insurance business, has to underwrite business in the rural sector to the extent of at least 2 per
cent of the gross premium during the first financial year,which is to be increased to 5 per cent
during the third financial year of its operation. Crop insurance is included in the rural sector
insurance for this purpose.” These targets set forth by IRDA are minimal and additional only a
nominal amount is required as a penalty in case any insurer does not meet above mentioned
business targets. With this condition, many get away by paying small penalties hence reducing
private participation. IRDA has a major role to play by increasing these business targets to ensure
more private participation in the rural segment for crop insurance.
Opportunities
In this section we will list out the areas of opportunities to address many of the core and long
standing issues listed out earlier within the Agriculture insurance implementation within India.
Most of the Agricultural areas are rain fed there isn’t good infrastructure like irrigation,
greenhouse etc available to help reduce yield risk. There has to be formal policy and budget put in
place by respective state governments to increase infrastructure spending to alleviate some of
these troubles for their local farmer population. In order to reduce the unit of insurance and go
based on the more reliable “Individual based approach” for accurate actuarialassessments and
pricing, it is key to obtain historical data and manage the operational/administrative setbacks.
There has to be more research carried out in this area to help in sound data collection, validation
and maintain this data in a centralized database,to be made available to all interested parties like
financial institutions, IRDA,research centers etc in order to carry out their respective
assessments. If this particular problem is resolved by the government then there can not only be
better premium assessments benefiting insurers, there can be better risk advisory performed to
help farmers maximize their yields, draw in more capacity from insurers/reinsurers and banking
institutions also benefit loss assessment and claims settlement in a timely manner.
To ease out the time delay on settlement of claims, Agriculture council has suggested to introduce
'on-account' settlement of claims, without waiting for the receipt of yield data,to the extent of 50
per cent of likely claims, subject to adjustment against the claims assessed on the yield basis.
Many of the farmers may not even hold bank accounts for the claims to be credited directly to
them. Many of this has to be considered ground up by the central government and incorporate the
basic fundamentals during policy planning. For ex: recently Reserve bank of India has given
directive to all public banks to increase the coverage to all rural areas including ATM’s this will
hopefully ensure that the pre-requisites are in place for Agro-insurance to widely spread amongst
non-loanee farmers.
Today there is more public – private competition than public private partnership in India.
11. There needs to be increased participation from the private sector,there are a number of private
players in Agriculture insurance but their participation or undertaking is very low. The
government should ensure that these firms are incentivized appropriately to accept more risks and
expand their client base. One of the ways that globally countries have included the private sector
is by providing reinsurance or IRDA to increase the business target mandate for crop insurance in
rural sector participation.
Further the government has recently announced that it is going to come up with a new
“Agriculture income Insurance scheme” to ensure that the farmers minimum income is
guaranteed in case of crop loss by 2016. More details and discussions around this scheme are still
being carved and not finalized. This is still good news on the works.
Lastly, more effective ways of image building and campaigns to spread awareness of Agriculture
insurance to farmers across the rural population of India is desired. There needs to be more
farmers being covered across the nation. India has more than 100 million farmers of which only
20% take bank loans and even less being insured. There is yet a lot of work needs to be done in
this area and scope to expand and cover about 80% of the remaining population is a huge
opportunity within agriculture insurance.
This projects the enormous insurance growth potential that exists in order to address the needs of
the farmer community, enhance overall efficiencies and competencies within this sector.
12. 12
References
Economic times, ‘Less than 20% farmers take crop insurance: Study’, April 12 2015. -
article
Pandaraiah & Sashidhar, K.V, ‘Crop Insurance: Farmers perception and awareness’, Jan
2015, Vol 3, Issue 1, 131.
Trivedi, Sashikant (2015), Business standard: ‘Centre to come up with agriculture income
insurance scheme’, June 16 2015. - article
Iturrioz, Ramiro (2009): Agriculture Insurance; primer series on insurance issue 12, June
2009, 35.
Loksabha Secretariat (2014): Crop Insurance in India; November 2014, 11.
Dandekar,V.M (1985): Crop Insurance in India A Review, 1976-77 to 1984-85,
Economic and Political Weekly, 20(25&26): A-46 to A-59.
Planning Commission (2007): Report of working Group on “Risk Management of
Agriculture” XI five year plan, May 2007, 143-167.
Raju,S.S and Chand, Ramesh (2008), Agriculture Insurance in India – problems and
prospects, National Centre for Agricultural Economics and Policy Research, March 2008,
87.
Ministry of Agriculture (2012): ‘Agricultural Statistics at a Glance’, Agricultural
Statistics Division, Department of Agriculture and Co-operation, Nov 27 2012, 387
13. Appendix
Table 1: Comparative study between yield and weather based insurance
(Source: S.S. Raju and Ramesh Chand)
Table 2: Socio-economic characteristics of sample households in Andhra Pradesh
(Source: S.S. Raju and Ramesh Chand)