Q. What are the various types of Agriculture Insurance Covers available in India? Explain any one type of Agriculture Insurance in detail.
Agriculture plays
a vital role in the economy of India, with a large proportion of the population
dependent on farming for their livelihood. However, farmers in India face
numerous challenges, such as unpredictable weather conditions, pest attacks,
diseases, and fluctuating market prices, which can significantly affect crop
yields and incomes. To mitigate these risks, the Indian government, along with
private insurance companies, offers various types of agriculture insurance
covers. These insurance schemes are designed to provide financial protection to
farmers against crop losses and other risks, ensuring that they can sustain
their livelihoods despite adverse conditions.
In this article,
we will discuss the different types of agriculture insurance available in India
and provide an in-depth explanation of one specific type of insurance.
Types of Agriculture Insurance Covers in India
1. Crop Insurance
o Crop Insurance is the most common type of
agricultural insurance, providing coverage for losses incurred due to natural
calamities, pests, diseases, or other unforeseen events that affect crop
production. It is designed to cover both food and cash crops, and it includes
several schemes, each with specific features.
2. Weather-Based Crop Insurance
o This type of
insurance is designed to cover farmers against losses caused by adverse weather
conditions such as drought, floods, frost, and hailstorms. The coverage is
based on the deviation in weather parameters (e.g., rainfall, temperature) from
the predetermined threshold levels for a specific area and time.
3. Livestock Insurance
o Livestock
Insurance is designed to protect farmers who own cattle, buffaloes, sheep, and
goats. It provides coverage against the loss of livestock due to diseases,
accidents, or natural disasters. The policy also covers veterinary expenses and
in some cases, the cost of artificial insemination.
4. Poultry Insurance
o This type of
insurance is specifically for poultry farmers and covers the risks associated
with poultry farming, such as bird flu, disease outbreaks, or other accidents
that may lead to the loss of poultry.
5. Farmers’ Personal Accident
Insurance
o Personal accident
insurance for farmers covers the financial risks associated with the accidental
death or disability of a farmer due to any accident occurring while engaged in
agricultural activities.
6. Horticulture Insurance
o Similar to crop
insurance, horticulture insurance is specifically tailored for farmers growing
fruits, vegetables, and flowers. It offers protection against damage to crops
due to adverse weather conditions, diseases, or pest attacks.
7. National Agricultural
Insurance Scheme (NAIS)
o The National
Agricultural Insurance Scheme (NAIS) was introduced in 1999 to provide crop
insurance coverage to farmers against crop losses caused by natural hazards. It
was later replaced by the Pradhan Mantri Fasal Bima Yojana (PMFBY) in 2016.
8. Pradhan Mantri Fasal Bima Yojana (PMFBY)
o The PMFBY is the
flagship crop insurance scheme launched by the Government of India in 2016 to
provide comprehensive coverage for crop loss due to natural calamities, pests,
diseases, and other specified risks. This scheme is aimed at providing
affordable and accessible insurance for farmers, especially small and marginal
farmers.
9. Restructured Weather-Based
Crop Insurance Scheme (RWBCIS)
o The RWBCIS is
designed to provide coverage to farmers against crop loss due to adverse
weather conditions. It is based on the monitoring of weather parameters, such
as rainfall, temperature, and humidity, which are compared against
pre-determined thresholds to determine the payout.
Detailed Explanation of One Type of Agriculture Insurance: Pradhan
Mantri Fasal Bima Yojana (PMFBY)
Among the various
agriculture insurance schemes in India, the Pradhan Mantri Fasal Bima
Yojana (PMFBY) is one of the most important and widely implemented
schemes. Launched by the Government of India in 2016, PMFBY is designed to
provide comprehensive insurance coverage to farmers against crop loss due to
natural disasters, pests, diseases, and other specified risks. The scheme aims
to support farmers by providing them with financial protection in times of crop
failure, thereby helping them to recover and continue their agricultural
activities.
Key Features of Pradhan Mantri Fasal Bima Yojana (PMFBY)
1. Coverage Against a Wide Range of Risks
o PMFBY provides
coverage for a variety of risks that can impact crop yields, such as:
§ Natural Calamities: Coverage is
provided against adverse weather conditions like droughts, floods, hailstorms,
cyclones, etc., that affect crop yields.
§ Pests and Diseases: The scheme also
covers crop losses due to pests, insects, and diseases that can damage crops.
§ Unseasonal Rainfall: Any unseasonal
rainfall that negatively impacts the growth of crops is also covered under this
insurance.
2. Crops Covered
o The scheme covers
both food crops and cash crops. It includes coverage for major crops like:
§ Food Crops: Rice, wheat,
pulses, maize, etc.
§ Oilseeds: Soybean, groundnut, mustard, etc.
§ Cotton, Sugarcane, and other Cash Crops: Various cash crops
grown in India are also covered under PMFBY.
3. Premium Structure
o One of the most
attractive features of PMFBY is its affordable premium structure. The
government subsidizes the premium to make the scheme affordable for farmers.
The premium rates under PMFBY are as follows:
§ For Kharif
Crops:
2% of the sum insured
§ For Rabi
Crops: 1.5%
of the sum insured
§ For Commercial
and Horticultural Crops: 5% of the sum insured
o The government
pays a significant portion of the premium, thus making it affordable for
farmers, particularly for small and marginal farmers who might otherwise be
unable to afford crop insurance.
4. Simplified Claims Process
o PMFBY is designed
with a focus on ease of use, especially when it comes to the claims process.
The scheme uses modern technology, such as remote sensing technology,
drones, and mobile applications, to assess crop damage and determine
the extent of the loss. This has simplified the process of filing claims and
reduced delays in payout.
o Claims are paid
based on the Area-Yield Approach or Individual-based
Approach, depending on the crop and region. In case of a claim, the
insurance company calculates the payout based on the loss assessment.
5. Subsidy from the Government
o To make crop
insurance more affordable and accessible, the government pays a significant
subsidy towards the premium. This subsidy is particularly beneficial for small
and marginal farmers who are more vulnerable to risks. The government pays
around 50% of the premium for these farmers, while the remaining portion is
covered by the farmer and the insurance company.
6. Exclusions
o There are some
exclusions under the PMFBY scheme, including:
§ Pre-existing Conditions: If the crops are
affected by pre-existing conditions or diseases that were not disclosed during
the policy’s initiation, they will not be covered.
§ Intentional Damage: Any damage
caused intentionally by the farmer, such as destruction of crops due to
negligence or malpractice, is not covered.
7. Eligibility Criteria
o PMFBY is available
to all farmers in India, including small and marginal farmers,
tenant farmers, oral lessees, and sharecroppers.
o The scheme is
available to both individual farmers and group farmers,
including cooperatives and farmer producer organizations (FPOs).
o It is mandatory
for farmers who avail of crop loans from financial institutions to enroll in
the scheme.
8. Implementation Process
o The scheme is
implemented through insurance companies, and farmers can buy
the policy from the designated insurance provider, either through agents, rural
banks, or online platforms.
o Enrollment in the
scheme typically occurs before the sowing season of each crop, and the premium
is paid upfront or through installments.
9. Timely Payouts and Benefits
o The key benefit of
the PMFBY scheme is its timely payout. In the event of a crop
loss, the farmer is entitled to a compensation payout based on the estimated
loss and the sum insured. This payout helps farmers recover from the financial
setback and continue with their agricultural activities.
o Additionally, the
scheme has a fast-track claim settlement process, ensuring
that farmers receive the compensation quickly, especially in the wake of a
natural disaster or crop failure.
10.
Technology Integration
o To improve the
efficiency and transparency of the scheme, PMFBY integrates technology
for the assessment of crop damage, data collection,
and claims settlement. This includes the use of remote
sensing, satellite imaging, and drones
to monitor crops and assess damage in real-time.
o The use of digital
platforms also allows farmers to easily apply for the scheme, track the status
of their claims, and access information about policy terms and conditions.
Advantages of Pradhan Mantri Fasal Bima Yojana
(PMFBY)
Financial
Security for Farmers
o The PMFBY scheme
provides a safety net for farmers against the unpredictable nature of
agriculture, offering them financial support when their crops fail due to
natural calamities or other risks. This financial protection ensures that
farmers do not suffer significant losses that could impact their livelihoods.
11.
Affordable Premiums
o The government
subsidy makes PMFBY premiums affordable for farmers, especially small and
marginal farmers who are more vulnerable to risks. The low premium rates ensure
that the scheme is accessible to a larger number of farmers.
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