It includes the condition of Agricultural Insurance before the independence and after the independence and currently running insurance scheme in 2015-16.
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 group presentation discusses agricultural insurance. It introduces the group members and defines agricultural insurance as the equitable transfer of risk from agricultural firms to insurance companies in exchange for premiums. It then describes various types of agricultural insurance policies like indemnity-based policies, index-based policies, and revenue-based policies. The presentation also covers specific insurance products for crops, livestock, aquaculture, forestry, and greenhouses. In closing, it discusses the importance of agricultural insurance for individuals, businesses, and society by providing security, peace of mind, protecting mortgaged property, and eliminating dependency.
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.
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.
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.
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.
For the undergraduate students of the course: Ag. Econ. 6.4 Farm Management, Production and Resource Economics (2+1) of Junagadh Agricultural University, Gujarat and other SAU's in India.
It includes the condition of Agricultural Insurance before the independence and after the independence and currently running insurance scheme in 2015-16.
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 group presentation discusses agricultural insurance. It introduces the group members and defines agricultural insurance as the equitable transfer of risk from agricultural firms to insurance companies in exchange for premiums. It then describes various types of agricultural insurance policies like indemnity-based policies, index-based policies, and revenue-based policies. The presentation also covers specific insurance products for crops, livestock, aquaculture, forestry, and greenhouses. In closing, it discusses the importance of agricultural insurance for individuals, businesses, and society by providing security, peace of mind, protecting mortgaged property, and eliminating dependency.
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.
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.
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.
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.
For the undergraduate students of the course: Ag. Econ. 6.4 Farm Management, Production and Resource Economics (2+1) of Junagadh Agricultural University, Gujarat and other SAU's in India.
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.
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.
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 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
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.
This document discusses the need for and sources of credit in Indian agriculture. It notes that agricultural credit is a crucial input, and that the major historical source was private moneylenders who charged high interest rates. To address this, a multi-agency approach using cooperatives, commercial banks, and regional rural banks now provides cheaper and more adequate credit to farmers. It then outlines the various financial needs of Indian farmers and the roles of credit. Finally, it details the major institutional sources of agricultural credit in India, including cooperatives, commercial banks, land development banks, regional rural banks, government loan schemes, and NABARD.
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.
Pradhan Mantri Fasal Bima Yojana (PMFBY) is India's crop insurance scheme that provides financial support to farmers suffering crop loss/damage from natural calamities. It offers affordable premiums of 2% for kharif crops, 1.5% for rabi crops, and 5% for annual commercial/horticulture crops. The scheme covers yield losses and post-harvest losses up to 14 days. It aims to stabilize farmer incomes, encourage modern farming practices, and ensure credit flow to agriculture. However, questions remain around its high costs and ability to effectively implement promised protections for farmers.
NABARD was established in 1982 to promote rural prosperity in India. It replaced existing agricultural credit and rural development institutions. NABARD operates nationwide with regional and district offices. Its mission is to support sustainable agriculture and integrated rural development through credit and other services. NABARD provides refinancing to banks and cooperatives, promotes rural policies, and works to enhance financial inclusion in rural areas through programs like Kisan Credit Cards, self-help groups, and watershed development.
The document outlines India's new national agricultural policy announced in 2000. The policy aims to actualize untapped growth in Indian agriculture by promoting infrastructure, value addition, agribusiness, and biotechnology to achieve 4% annual growth over 20 years. It also seeks to boost exports, ensure food security and fair incomes for farmers, and address issues arising from economic reforms and globalization. The first national agricultural policy emerged in the 1960s in response to drought and war, and resulted in increased GDP, FDI, and exports.
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
The document outlines objectives and features of the National Agricultural Policy (NAP) 2000, which aimed to establish an appropriate environment to achieve higher agricultural growth in India. The key objectives of NAP 2000 included achieving a growth rate of over 4% annually through structural changes, reforms, efficient resource use, and market orientation. Features included encouraging private participation, competitiveness through liberalization, tax reforms, futures markets, infrastructure development, and credit/insurance expansion to transform agriculture into a modern and productive sector. An evaluation found growth rates increased but small farmers were neglected and infrastructure remained poor.
This presentation says all about Regulation of agricultural marketing, regulated markets, state agricultural marketing boards, recent initiatives for improving agricultural marketing.
This study examines the history of agricultural insurance schemes in India, including the challenges of implementing them. It discusses several schemes launched over time, from an initial individual farmer approach in the 1970s to the latest National Crop Insurance Program in 2013. Major issues with agricultural insurance in India include large insured areas, unreliable historical data, lack of awareness among non-loan farmers, and high premium rates.
The document discusses various types of insurance contracts in India including life, fire, and marine insurance. It outlines key elements such as insurable interest, indemnity, disclosure requirements, and types of policies for each. For life insurance, it describes who can have an insurable interest and different types of life policies. For fire insurance, it discusses the average clause, insurable interest, and types of fire policies. For marine insurance, it discusses insurable interest, maritime perils, and types of marine policies.
Contract farming is an agreement between farmers and processing/marketing firms where farmers grow and supply agricultural products under certain conditions, often at predetermined prices. Historically, contract farming began in the 1920s in India when ITC introduced tobacco cultivation. It provides benefits like inputs and credit for farmers, while ensuring regular supply and price stability for companies. The government aims to facilitate connections between farmers and businesses through contract farming as well as research support, while avoiding overregulation. Examples include poultry, flower, and tomato contract farming projects in India.
Lead Bank Scheme:
The complete details of the lead bank scheme are available here. In the banking awareness section, you have to prepare more topics. Only then you can crack your dream bank exams with ease. The lead bank scheme is Aim:
The Lead Bank Scheme, introduced towards the end of 1969, envisages the assignment of lead roles to individual banks (both in the public sector and private sector) for the districts allotted to them.
Recommendation:
The Lead Bank Scheme was introduced by RBI on the basis of the recommendations of both the Gadgil Study Group and Banker’s Committee (Nariman Committee).
Role:
The function of the lead banks is to coordinate the efforts of all other banks, financial institutions, and other development agencies for bringing about the overall development of the districts, especially in the rural and semi-urban areas.
Objectives:
Here are the objectives of the lead bank scheme.
1) Eradication of unemployment and underemployment.
2) Provision of some of the basic needs of the people who belong to poor sections of the society.
3) Appreciable rise in the standard of living for the poorest of the poor.
4) Another objective was to help in removing regional imbalances through appropriate credit deployment.
5) The main objective was to extend banking facilities to unbanked areas
6) It was observed in the studies by the committee that there are certain credit gaps in a various sector which need to be address and a credit plan is needed.
Functions:
The function of the lead banks is to coordinate the efforts of all other banks, financial institutions, and other development agencies for bringing about the overall development of the districts, especially in the rural and semi-urban areas.
Grant of Educational Loans
Progress under SHGs- bank linkage
Review of Performance of banks under Annual Credit Plan (ACP)
Survey resources and development of banking in the area.
Survey the dependency on money lenders by industrial units, farms, etc.,
Survey the facilities for storing (fertilizers & agricultural inputs), marketing, credit facilities for marketing.
Offering training to staff for advice to small borrowers & farmers in priority sectors
Advantages:
Spread the availability of banking facilities all over the country.
Interlink the Commercial and Cooperative Banks.
More effective Branch Expansion.
Better relationship between Govt. and Banks.
Integration of credit activities of banks.
Bottlenecks in the development of a District can be located and removed.
Lead Bank Scheme would assist in the implementation of the District Plan
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.
This document provides an overview of crop insurance globally and in India. It discusses what crop insurance is, the history of crop insurance beginning in the 1820s in France and Germany. It outlines reasons for crop insurance including natural hazards affecting crops. It describes different types of agricultural insurance products and compares indemnity vs index based insurance. The document also discusses global penetration of agricultural insurance, with most policies in high income countries. It then focuses on crop insurance schemes in India from the 1970s onward and analyzes their limitations. Statistics on area insured and claims paid in India are presented. The US federal crop insurance program is also summarized.
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.
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.
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 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
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.
This document discusses the need for and sources of credit in Indian agriculture. It notes that agricultural credit is a crucial input, and that the major historical source was private moneylenders who charged high interest rates. To address this, a multi-agency approach using cooperatives, commercial banks, and regional rural banks now provides cheaper and more adequate credit to farmers. It then outlines the various financial needs of Indian farmers and the roles of credit. Finally, it details the major institutional sources of agricultural credit in India, including cooperatives, commercial banks, land development banks, regional rural banks, government loan schemes, and NABARD.
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.
Pradhan Mantri Fasal Bima Yojana (PMFBY) is India's crop insurance scheme that provides financial support to farmers suffering crop loss/damage from natural calamities. It offers affordable premiums of 2% for kharif crops, 1.5% for rabi crops, and 5% for annual commercial/horticulture crops. The scheme covers yield losses and post-harvest losses up to 14 days. It aims to stabilize farmer incomes, encourage modern farming practices, and ensure credit flow to agriculture. However, questions remain around its high costs and ability to effectively implement promised protections for farmers.
NABARD was established in 1982 to promote rural prosperity in India. It replaced existing agricultural credit and rural development institutions. NABARD operates nationwide with regional and district offices. Its mission is to support sustainable agriculture and integrated rural development through credit and other services. NABARD provides refinancing to banks and cooperatives, promotes rural policies, and works to enhance financial inclusion in rural areas through programs like Kisan Credit Cards, self-help groups, and watershed development.
The document outlines India's new national agricultural policy announced in 2000. The policy aims to actualize untapped growth in Indian agriculture by promoting infrastructure, value addition, agribusiness, and biotechnology to achieve 4% annual growth over 20 years. It also seeks to boost exports, ensure food security and fair incomes for farmers, and address issues arising from economic reforms and globalization. The first national agricultural policy emerged in the 1960s in response to drought and war, and resulted in increased GDP, FDI, and exports.
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
The document outlines objectives and features of the National Agricultural Policy (NAP) 2000, which aimed to establish an appropriate environment to achieve higher agricultural growth in India. The key objectives of NAP 2000 included achieving a growth rate of over 4% annually through structural changes, reforms, efficient resource use, and market orientation. Features included encouraging private participation, competitiveness through liberalization, tax reforms, futures markets, infrastructure development, and credit/insurance expansion to transform agriculture into a modern and productive sector. An evaluation found growth rates increased but small farmers were neglected and infrastructure remained poor.
This presentation says all about Regulation of agricultural marketing, regulated markets, state agricultural marketing boards, recent initiatives for improving agricultural marketing.
This study examines the history of agricultural insurance schemes in India, including the challenges of implementing them. It discusses several schemes launched over time, from an initial individual farmer approach in the 1970s to the latest National Crop Insurance Program in 2013. Major issues with agricultural insurance in India include large insured areas, unreliable historical data, lack of awareness among non-loan farmers, and high premium rates.
The document discusses various types of insurance contracts in India including life, fire, and marine insurance. It outlines key elements such as insurable interest, indemnity, disclosure requirements, and types of policies for each. For life insurance, it describes who can have an insurable interest and different types of life policies. For fire insurance, it discusses the average clause, insurable interest, and types of fire policies. For marine insurance, it discusses insurable interest, maritime perils, and types of marine policies.
Contract farming is an agreement between farmers and processing/marketing firms where farmers grow and supply agricultural products under certain conditions, often at predetermined prices. Historically, contract farming began in the 1920s in India when ITC introduced tobacco cultivation. It provides benefits like inputs and credit for farmers, while ensuring regular supply and price stability for companies. The government aims to facilitate connections between farmers and businesses through contract farming as well as research support, while avoiding overregulation. Examples include poultry, flower, and tomato contract farming projects in India.
Lead Bank Scheme:
The complete details of the lead bank scheme are available here. In the banking awareness section, you have to prepare more topics. Only then you can crack your dream bank exams with ease. The lead bank scheme is Aim:
The Lead Bank Scheme, introduced towards the end of 1969, envisages the assignment of lead roles to individual banks (both in the public sector and private sector) for the districts allotted to them.
Recommendation:
The Lead Bank Scheme was introduced by RBI on the basis of the recommendations of both the Gadgil Study Group and Banker’s Committee (Nariman Committee).
Role:
The function of the lead banks is to coordinate the efforts of all other banks, financial institutions, and other development agencies for bringing about the overall development of the districts, especially in the rural and semi-urban areas.
Objectives:
Here are the objectives of the lead bank scheme.
1) Eradication of unemployment and underemployment.
2) Provision of some of the basic needs of the people who belong to poor sections of the society.
3) Appreciable rise in the standard of living for the poorest of the poor.
4) Another objective was to help in removing regional imbalances through appropriate credit deployment.
5) The main objective was to extend banking facilities to unbanked areas
6) It was observed in the studies by the committee that there are certain credit gaps in a various sector which need to be address and a credit plan is needed.
Functions:
The function of the lead banks is to coordinate the efforts of all other banks, financial institutions, and other development agencies for bringing about the overall development of the districts, especially in the rural and semi-urban areas.
Grant of Educational Loans
Progress under SHGs- bank linkage
Review of Performance of banks under Annual Credit Plan (ACP)
Survey resources and development of banking in the area.
Survey the dependency on money lenders by industrial units, farms, etc.,
Survey the facilities for storing (fertilizers & agricultural inputs), marketing, credit facilities for marketing.
Offering training to staff for advice to small borrowers & farmers in priority sectors
Advantages:
Spread the availability of banking facilities all over the country.
Interlink the Commercial and Cooperative Banks.
More effective Branch Expansion.
Better relationship between Govt. and Banks.
Integration of credit activities of banks.
Bottlenecks in the development of a District can be located and removed.
Lead Bank Scheme would assist in the implementation of the District Plan
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.
This document provides an overview of crop insurance globally and in India. It discusses what crop insurance is, the history of crop insurance beginning in the 1820s in France and Germany. It outlines reasons for crop insurance including natural hazards affecting crops. It describes different types of agricultural insurance products and compares indemnity vs index based insurance. The document also discusses global penetration of agricultural insurance, with most policies in high income countries. It then focuses on crop insurance schemes in India from the 1970s onward and analyzes their limitations. Statistics on area insured and claims paid in India are presented. The US federal crop insurance program is also summarized.
Presentation made by Annette Houtekamer (Business Development Manager, ACHMEA, Netherlands) at the 6th ICMIF Development Network Seminar (1-2 November 2012; Nairobi, Kenya)
PMFBY is India's largest crop insurance scheme that provides coverage to over 50 crore farmers for over 50 crops. It aims to stabilize farm incomes against losses from natural calamities. Key features include lower premiums of 2-5% paid by farmers, higher government subsidy, and coverage of localized risks. While it provides timely financial support, some issues remain around delays in claims, benefit to insurance companies, and lack of awareness. Overall, PMFBY helps reduce farmers' economic losses from natural disasters through affordable insurance coverage.
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.
Indira Gandhi Institute for Development Studies(IGIDR), and the International Food Policy Research Institute (IFPRI) on
‘Harnessing Opportunities to Improve Agri-Food Systems’ on July 24-25 , 2014 in New Delhi.
The two day conference aims to discuss the agricultural priority of the government and develop a road map to realise these priorities for improved agri food systems.
Selling weather index insurance to farmers in ethiopia lessons learnedessp2
Weather risk remains a major challenge for farmers in Ethiopia. Drought can significantly impact households' consumption levels and welfare. Index-based weather insurance offers possibilities to help farmers manage risk, but basis risk and lack of trust have limited demand. A study in Ethiopia tested selling insurance through informal risk-sharing groups called iddirs. Key lessons included the need to minimize basis risk, subsidize prices, build trust over time, and sell early in the growing season. Selling through groups helped increase sales by addressing some idiosyncratic basis risk. With smart subsidies and continued product improvements to reduce basis risk, index insurance could help vulnerable households if combined with other risk management strategies.
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.
Formal and Informal Insurance: Experimental Evidence from Ethiopiaessp2
Mandating increased risk-sharing through iddir groups in Ethiopia. This encouraged higher demand for formal weather index insurance by 29% and increased some welfare outcomes. Formal insurance on its own encouraged more productive investments like fertilizer use but strengthening informal risk-sharing did not have additional impact beyond increasing insurance demand. The study tested the impacts of formal insurance, strengthening informal groups, and combining both approaches on outcomes like investments, transfers and welfare using a randomized controlled trial with over 100 villages.
Linking Formal and Informal Insurance: Experimental Evidence from EthiopiaBASIS AMA Innovation Lab
At the Workshop on Innovations in Index Insurance to Promote Agricultural and Livestock Development in Ethiopia held on December 3rd, 2015 in Addis Ababa, Guush Berhane from the International Food Policy Research Institute presented on the complementarity of index insurance programs and informal risk-sharing groups
Livestock Insurance Schemes: Demand for and Application by Small holders and ...copppldsecretariat
Presentation from the Livestock Inter-Agency Donor Group (IADG) Meeting 2010. 4-5 May 2010 Italy, Rome IFAD Headquarters.
The event involved approximately 45 representatives from the international partner agencies to discuss critical needs for livestock development and research issues for the coming decade.
[ Originally posted on http://www.cop-ppld.net/cop_knowledge_base ]
The document summarizes a field experiment conducted in Ethiopia to test the impact of providing index-based rainfall insurance to informal risk-sharing groups. The experiment randomized the type of training provided to group leaders on the insurance product, with some receiving individual-focused training and others receiving group-focused training emphasizing risk-sharing. Preliminary results found higher insurance take-up rates among members of groups whose leaders received the group risk-sharing training compared to individual training, suggesting such group-level products have potential to increase demand for index insurance.
This document provides an overview and summary of the 2012 Farm Bill. It discusses the context around federal farm policy, conservation policy, and commodity production policies. Key points include: the Farm Bill is reauthorized every 5 years; conservation funding and programs have faced significant budget cuts; crop insurance has replaced commodity subsidies as the dominant form of agricultural support; and balancing priorities around conservation, rural economic development, and risk management will be challenges in developing new farm policy.
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.
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.
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Dr. Kolli Rao of Aon Benfield/IRICS presented on index-based crop insurance in India at the workshop on Mobilizing a CGIAR Agricultural Insurance Community in Washington, DC, 20-22 January 2014, hosted by the International Food Policy Research Institute and the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS). Read more about CCAFS work on index-based weather insurance: http://bit.ly/Ll7Z7Z
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Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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Agricultural Insurance
1. Food and Agriculture Organization
Of the United Nations
Agricultural insurance
Training of Trainers Workshop to
Enhance Pro-poor Policy Formulation
and Implementation at Country Level
21 – 25 September 2015
Bangkok, Thailand
2. Outline
• What is insurance: a parable
• What is required for insurance to work?
• Types of risks in agriculture
• The special nature of agricultural risks
• Types of agricultural insurance
• Is agricultural insurance a panacea?
• What can we reasonably expect
agricultural insurance to do?
2
3. Parable to explain insurance
• Holy man:
“ Your next child will be a boy or money back”
• Two families send Rs 100 each
• Logical possibilities:
3
Family 1 Family 2 Holy man’s
earnings
Boy Boy 200
Boy Girl 100
Girl Boy 100
Girl Girl 0
4. Parable continued
• 3 families: logical possibilities
4
Family 1 Family 2 Family 3 Earnings
Boy Boy Boy 300
Boy Boy Girl 200
Boy Girl Boy 200
Boy Girl Girl 100
Girl Boy Boy 200
Girl Boy Girl 100
Girl Girl Boy 100
Girl Girl Girl 0
5. Parable continued
• When 2 families send money, chance that
holy man has to return all the money?
1 / 22 = 1 / 4
• When 3 families send money?
1 / 23 = 1 / 8
• When 20 families send money?
1 / 220 = 1 / 1 000 000 (!!)
5
6. What does this have to do with
insurance?
• Take case of 3 families,
• Insurance company says:
– Send us money every month (premium), we
give you powerful charm to protect car (!!)
– If your car is stolen, we return your premium
and give you enough money to buy new car
– This has the same structure as the boy-girl
problem
• Change girl to “car stolen” and boy to “not stolen”.
6
7. What is insurance and how does it
work?
• A way of sharing or pooling risk
– Risk: “undesirable fluctuations in consumption
that are not perfectly predictable”
• But does not eliminate risk
• Spreads risk across an industry or
economy and through time
7
8. Income risks facing poor rural households
Crop failure (partial or complete)
Death of livestock
Price shocks
Illness or death of household members
Loss of employment or self-employment
Natural calamities (drought, flood, fire etc.)
War and other forms of violence, e.g. crime
1. RISK-MANAGEMENT
STRATEGIES I.E. STRATEGIES
TO STABILIZE INCOME
A. Crop and field diversification
B. Diversification of income
sources
C. Contractual arrangements such
as sharecropping, bonded labour
D. Adoption of hardier crop and
livestock varieties
2. RISK-COPING STRATEGIES I.E.
STRATEGIES TO STABILIZE
CONSUMPTION
A. Saving
B. Access to credit from formal and
informal sources
C. Marriage outside the village and
other means of building alliances
D. Reducing consumption
E. Risk sharing arrangements , i.e.
insurance 8
9. Benefits of insurance
• Helps households and governments
manage natural hazards
• More efficient than credit and savings if the
financial market is not well developed
• Reduces credit default risk
• Facilitates adoption of production
innovations
• Enhances agricultural production and
possibly competitiveness
9
10. What is required for insurance to work?
“Work” means that insurance company should
not lose money and should be able to pay
back insured people when loss occurs
1. Large no. of people take out insurance
2. Risks are independent
3. “Making whole”:
1. Company should know how much it costs to restore
insured to original position
10
11. Crop insurance: special issues
• Risks are not independent (“covariate
risks”)
• How to “make whole” is difficult to decide
– E.g. hailstorm before crops harvested. How
does insurance company know what the value
of the final crop would have been?
• Loss to individual farmer is hard to assess
11
12. Crop insurance: solutions
• Link crop insurance to credit and savings
schemes
– Provide insurance for input loans
– Work with micro lenders to allow farm
households to build up their savings
• Crop insurance and livestock insurance
12
13. Traditional insurance products
• Single (Named) Peril
• Multiple Peril
Actual physical loss or damage is measured
in-field, and the claim is specific to that
field/farmer
13
14. Innovative insurance products
• Crop area yield index insurance
• Crop weather index insurance
• Livestock mortality index insurance
The claim is calculated based on an external
index designed to reflect as accurately as
possible the loss incurred by the farmer 14
15. Public Subsidies
• Argument for subsidies for premiums and
operational expenses:
– Farmers prefer multiple peril and revenue
insurance rather than index insurances.
– Such types of insurance are costly and
subsidies are required to keep premium levels
at an affordable level
• Premium depends on chance of loss x extent of loss
• Build in safety factor to allow for fact that e.g.
droughts run in cycles of several years.
15
16. Public subsidies
• Should be oriented to providing public
goods
– Market development
– Legal and regulatory reform
– Reinsurance
– Well managed disaster relief funds
16
17. Reinsurance
• Useful for protecting against natural
disasters affecting large numbers of
people
– Quite common in agriculture
• Reinsurance is provided for losses
exceeding a mutually agreed upon rate
• International reinsurers can spread their
risks across many countries / agro-
ecological zones
17
18. Agricultural insurance:
Key considerations
• What perils should be protected against?
• Target commodities / target audience?
• Requirements of different agricultural
sectors (crops, livestock, fisheries,
forestry)
• What are the legal & regulatory
requirements?
• What is the real demand for the insurance
product? 18
19. Agricultural insurance in the region
• FAO survey of agricultural insurance in the
region 2010
– Agric insurance available in 20 countries of
the region
– Agricultural premiums grew from USD 1.6 bn
in 2005 to USD 4 bn in 2009
– Major markets for agric insurance are (2009):
• China (50%)
• Japan (31%)
• India (11%)
• Australia (4%)
• Korea (3%)
19
20. Agricultural insurance in the region (cont’d)
• Total agricultural insurance premiums:
– 60% crop insurance
– 40% livestock insurance
• Public sector subsidised multiple peril crop
insurance schemes have generally
performed poorly and been replaced by
Public-Private partnerships
• Weather index insurance introduced in India
in 2003, extended gradually to other
countries
20
21. Agricultural insurance in the region (cont’d)
• Govt support to agric insurance
– Premium subsidies: USD 2 bilion in 2009
– Subsidies to A&O expenses
• Modalities:
– Public sector (high penetration / social over
tech criteria / high fiscal cost)
– Public-private partnership (high penetration /
tech over comm criteria / moderate fiscal cost)
– Pure market based (low to moderate
penetration / comm over tech criteria / no fiscal
cost)
21
22. Agricultural insurance:
Case study of India
• NAIS area-yield index multiple peril crop
insurance scheme
• Has 3 objectives:
– Provide financial support to farmers if crop
failure
– Restore credit eligibility of farmers after crop
failure for next season
– Support and stimulate prod of cereals, pulses
and oilseeds
22
23. Agricultural insurance:
Case study of India
• NIAS Sold 20 million policies in 2007
– 15% of farmers
– 14% of gross cropped area
• Livestock insurance
– 3% of cattle are covered
• Weather index insurance
– Introduced in 2003
– By 2008 had reached 0.6 million farmers
– By 2013 had reached 3 million farmers 23
24. Agricultural insurance:
Case study of India
• Market structure:
– Agriculture Insurance Company of India (AIC)
• Public sector specialist crop insurance company
• Responsible for implementing NAIS
– ICICI Lombard and IFFCO-Tokyo
• Crop weather index insurance for poor farmers
– Public sector insurance companies providing
livestock insurance
24
25. Agricultural insurance:
Case study of India
• Agricultural insurance products:
– MPCI: covers food crops, oilseeds,
horticultural and commercial crops
– MPCI: Yield loss resulting from
• Natural fires and lightning
• Storms, hailstorms, hurricanes, cyclones etc
• Floods, landslides etc.
• Droughts, dry spells
• Pests/diseases etc.
25
26. Agricultural insurance:
Case study of India
• Agricultural reinsurance
– NAIS is reinsured by government under 50:50
excess of loss agreement by the central
government and participating state govts
• If made more market oriented, could face serious
constraints in obtaining reinsurance bec large size
– AIC’s weather index program reinsured partly
by GIC (General Insurance Co.) and partly by
international reinsurers
– Livestock epidemic disease reinsurance is not
available 26
27. Agricultural insurance:
Case study of India
• Public subsidies to agricultural insurance
– Premium subsidies (USD 7 mn)
• Caps on premiums for food crops and oilseeds
below actuarially fair rates (available to everyone)
• Subsidies to small and marginal farmers
– Premium subsidies on crop weather index
insurance (USD 25 mn)
– Subsidies on AIC’s A&O (Administrative and
Organizational) expenses (USD 3.3 mn)
– Excess of loss reinsurance (USD 228 mn)
27
28. Conclusions
• Agricultural insurance has some special
issues which must be confronted
– Covariate risk
– How to make whole
• Farmers must perceive that the expected
benefits are greater than the premiums
• Agricultural insurance is likely to require
subsidies and/or reinsurance to be
financially viable 28
30. Indonesia rice sector insurance
scheme, 2009
• Micro analysis of risks in rice production
(at regency level) shows that rats and
stem borers in both locations are the
main factors causing loss of rice
production
30