Crop Insurance Reforms

Crop insurance is insurance purchased by agricultural producers and subsidized by a country’s government to protect against either the loss of their crops due to natural disasters, such as hail, drought, and floods (“crop-yield insurance”, or the loss of revenue due to declines in the prices of agricultural commodities (“crop-revenue insurance”).
Crop Insurance is a comprehensive yield-based policy meant to compensate farmers’ losses arising due to production problems. It covers pre-sowing and post-harvest losses due to cyclonic rains and rainfall deficit. These losses lead to reduction in crop yield, thus, affecting the income of farmers. All farmers growing notified crops in notified areas as notified by the State government are eligible for availing insurance. Crops of loanee farmers are compulsorily insured, while non- loanee farmers can insure their crops at their option The first crop insurance program was introduced in 1972-73 by the ‘General Insurance’ Department of Life Insurance Corporation of India

Advantages of Crop Insurance
Let us look at some of the advantages of buying crop insurance:

👉🏻Provides financial support to farmers thus, covers crop loss and damage arising out of unforeseen events
👉🏻Tax exemption on the premium paid by the farmers against the purchase of the crop insurance policy
👉🏻Farmers would get peace of mind as they don’t need to take loans from private lenders at higher interest rates
👉🏻Encourages farmers to adopt modern and innovative agriculture practices that further increase their personal income
👉🏻Economy of the country will get strengthened as farmers can repay loans with the reimbursement received from the crop insurance

Insurance Companies Offering Crop Insurance In India
Some of the insurance companies offering crop insurance in India are:

👉🏻Tata AIG General Insurance
👉🏻Reliance General Insurance
👉🏻IFFCO-Tokio General Insurance
👉🏻Bajaj Allianz General Insurance
👉🏻SBI General Insurance

Documents Required For Claim Process
Some of the key documents that are required by the farmers to make claims under crop insurance are mentioned below:

👉🏻Duly completed claim form
👉🏻Land Registration Papers or Land Patta Number
👉🏻Land Ownership Documents
👉🏻Aadhar Card
👉🏻Personal Identification Proof like ration card, PAN Card, and/or voter card
👉🏻Bank Account Details
👉🏻Sowing Declaration
👉🏻Claim Reimbursement Form or the Application Form

Types Of Crop Insurance
Crop insurance is categorised into 3 types:

👉🏻Multiple Peril Crop Insurance: Provides financial coverage to manage risks arising from weather-related losses, such as a flood, drought, etc.
👉🏻Actual Production History: Covers losses due to wind, hail, insects, etc. Also includes coverage for lower yield and compensates for the difference between the estimate and the real
👉🏻Crop Revenue Coverage: This is based not only on the crop yield but on the total revenue generated from this yield. In case of a drop in crop price, the difference is covered by this type of crop insurance

Eligibility Criteria
👉🏻Crop Insurance can be availed by the farmers including share croppers and tenant farmers provided they are growing the notified crops in the area
👉🏻Non-Loanee farmers are also eligible to avail benefits under crop insurance upon providing land documents
👉🏻Two more categories are identified in which the farmers can receive the perks. These are also called Types of Coverage Components and they are:
👉🏻Compulsory Component: If farmers have applied for Seasonal Agriculture Operations (SAO) credit or loans from the financial institution for the notified crops, they will be covered compulsorily

👉🏻Voluntary Component: Crop Insurance is option for those farmers who fall under non-loanee farmers. If they wish to, they can register and avail benefits from the government scheme

Crop insurance schemes in India
The government has implemented four insurance schemes to support farmers and they are as follows;

-Pradhan Mantri Fasal Bima Yojana (PMFBY)

-Weather-based Crop Insurance Scheme (WBCIS)

-Pilot Unified Package insurance scheme (UPIS)

-Coconut Palm insurance scheme (CPIS)

This is all about Crop Insurance. Along with this, one more thing is good to know that, there are various types of crop insurance such as Crop-hail insurance, Multiple peril crop insurance, Yield-based, and revenue-based crop insurance. So, you can choose as per your need.  In a series of articles, we will cover up all the aspects of Crop Insurance in India, its importance, and why the farmers need to understand it for their financial security.

Risks Covered Under Crop Insurance Schemes
The following risks are covered under the crop insurance schemes:

👉🏻Basic cover – It covers yield losses to the standing crop due to non-preventable risks like disease attacks, dry spells, landslides, drought, storms, inundation, flood, cyclones, hailstorms and natural fire due to lightning.

👉🏻Prevented planting risk/sowing/germination – It provides cover against any problem in sowing or planting because of adverse seasonal conditions or deficit rainfall.

👉🏻Mid-season adversity – It provides relief to farmers against losses occurring due to adverse seasonal conditions where the expected yield during the season is below 50% of the normal yield.

👉🏻Post-harvest losses – It covers losses for up to a maximum of two weeks from harvesting.

👉🏻Localised calamities – It covers losses against localised calamities and risks like landslides and hailstorms affecting isolated farms in the notified areas.

👉🏻General exclusions – The losses arising from war, nuclear risks, malicious damage and other preventable risks are excluded from the insurance cover