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Crop Insurance

When agriculture is associated with calamities and risks that are beyond our control, it is vital to adopt preventative measures to limit the damage that farmers incur. Crop insurance is a type of insurance policy that protects and compensates farmers for market-dependent profit losses from product sales at the project crop yield or market.
Crop insurance aids in the stabilization of crop production and mitigate the negative impact it has on farmers’ life. Crop insurance has become a necessity for agricultural-related issues in light of the current situation.

Why Crop Insurance Is Important?

Crop insurance protects farmers’ crops from unforeseeable failures. Below are some of the reasons why crop insurance is essential for farmers:

  1. Minimum Debts: With the help of a suitable insurance partner, farmers may repay their loans even when their crops fail.
  2. Protects Yield: Crop insurance protects farmers against crop loss through yield protection. It also provides security for replanting and preventive planting.
  3. Stability In Income: It protects farmers from losses caused by crop failure. It functions as a tool for farmers to manage yield and pricing risks, thus stabilizing their incomes.
  4. Promotes Awareness: Farmers can learn about the effects of natural disasters and how to protect their fields through awareness initiatives sponsored by insurance companies.

List Of Crop Insurance Schemes In India

When it comes to India, there are four major crop schemes that a farmer should consider buying. They are as follows:

National Agricultural Insurance Scheme (NAIS)

The Scheme was implemented by Agriculture Insurance Company of India Limited for the Rabi 1999-2000 season, replacing the Comprehensive Crop Insurance Scheme (CCIS). The Scheme’s major goal was to compensate farmers for losses incurred as a result of crop failure due to natural calamities such as drought, flood, hailstorm, cyclone, fire, pest, diseases, and so on, in order to recover their credit. Regardless of the size of their holding, the scheme is open to all farmers, both loanee and non-loanee.

Modified National Agriculture Insurance Scheme (MNAIS)

The Government of India formed a Joint Group to evaluate existing crop insurance plans in order to improve the scheme and make it easier and more farmer-friendly. A proposal for the Modified National Agricultural Insurance Scheme (MNAIS) was prepared based on the Joint Group’s recommendations and the views/comments of various stakeholders, and it was approved for pilot implementation in 50 districts during the remaining period of the 11th Plan from Rabi 2010 to Rabi 2011.

Weather Based Crop Insurance (WBCI)

A Weather Based Crop Insurance Scheme (WBCIS) was launched in 20 states with the goal of bringing more farmers into the Crop Insurance fold. WBCIS tries to protect farmers from severe weather events such as drought, excess rain, high or low temperatures, humidity, and other factors that are thought to have a negative impact on crop productivity. It offers the advantage of resolving claims in the quickest time possible.

Pradhan Mantri Fasal Bima Yojana (PMFBY)

Prime Minister Shri Narendra Modi launched the Pradhan Mantri Fasal Bima Yojna on February 18, 2016. PMFBY provides complete insurance protection against crop failure, thereby assisting farmers in stabilizing their income. In Kharif 2016, 21 states and two UTs implemented the plan, whereas, in Rabi 2016-17, 23 states and two UTs did so.

What Is Covered Under A Crop Insurance?

Crop loss can occur due to various reasons. Let’s know what’s covered under a crop insurance policy!

  1. Risks Associated With Planting, Sowing, Or Germinating: Any trouble in planting or sowing due to a lack of rain or unfavorable seasonal conditions are covered under the plan.
  2. Local Calamities: It protects isolated farms in the designated region from localized disasters and threats such as hailstorms and landslides.
  3. Losses After Harvesting: The insurance also covers losses for up to two weeks after harvesting.
  4. Standing Crop Loss: Dry spells, floods, hailstorms, cyclones, and typhoons are all examples of non-preventable risks that might result in yield losses. They all are covered under a crop insurance plan.

Who All Are Eligible To Buy Crop Insurance?

People belonging to the following categories are eligible to buy crop insurance:

  • Farmers Growing Notified Crops: Farmers, including sharecroppers and tenant farmers, can purchase crop insurance if they are growing the notified crops in the area.
  • Non-Loanee Farmers: Crop insurance benefits are also available to non-loanee farmers who provide land documentation. Besides the above categories, there are two more categories under which farmers are eligible for availing of the benefits. They are:
  • Compulsory Component: Farmers will be covered if they apply for Seasonal Agriculture Operations (SAO) credit or loans from a financial institution for the notified crops.
  • Voluntary Component: Crop insurance is an option for farmers who come under the category of non-loanee farmers. They can register and profit from the government scheme if they choose to.

How Does Crop Insurance Work?

Crop insurance works by protecting farmers and agricultural producers from crop loss due to extreme weather events such as floods, hail, and drought, as well as revenue loss owing to price fluctuations in the agricultural commodity market. It allows policyholders to insure their food crops, oilseeds, and annual commercial crops by submitting the relevant documentation and paying the premium.
The amount of coverage will be determined by a number of factors, including the type of crop, location, and catastrophe years in the area, as well as historical yield statistics. However, a policy must be chosen after assessing the risks and comparing the various plans and companies.

How To Buy A Crop Insurance Policy?

Crop insurance can be bought through an offline method. It is discussed as below:
You can visit the branch office of any government-backed insurance provider. A customer care executive of the insurance provider will listen to your needs and requirements and will provide you with suitable options for insurance plans. Select your plan as per your requirements and submit all the necessary documents.
Once the documentation process is completed, all your documents will be verified by the insurance provider. After the verification is done, you will be required to pay for the plan. You will get your plan with all of your policy documents.

Claim Process Of A Crop Insurance Plan

One can file a claim against crop insurance by contacting the nearest branch of his/her respective insurance provider. After consulting with the executive, you need to share all the documents. Once the verification is done and if it’s a positive outcome, the insurance provider will process the claim.

Documents Required

  • Duly filled claim form
  • Land registration papers
  • Documents of land ownership
  • Aadhar card
  • Bank account details
  • Personal identification proof, such as PAN card, voter ID card, etc.

Frequently Asked Questions

Most frequent questions and answers about Cattle Insurance FAQs

Individual assessments are typically undertaken in the insured area to determine loss at the pre-sowing, post-harvest, and crop cutting stages, as well as crop cutting experiments.

Usually, the following things are not covered under a crop insurance plan:

  • Damage from pesticide drift
  • Fire
  • Negligence
  • failure to follow good farming practices

The guarantee is computed by multiplying the average output by the crop coverage level chosen by the grower. If the production (harvested and appraised) is less than the guaranteed amount, an indemnity or loss payment may be owed.

The following risks are covered under the PMFBY crop insurance plan:

  • Yield losses
  • Prevented sowing
  • Post-harvest losses
  • Localized calamities
Farmers who have an insurable interest in notified crops and are growing them in a notified area during the season are eligible.

MNAIS is a step forward from NAIS in that it is based on actuarial premium rates. Farmers are projected to benefit more from this scheme as a result of the coverage of prevented sowing/planting risk and post-harvest losses, as well as an increase in the minimum indemnity level from 60% to 70% and a more precise assessment of threshold yield.

Loanee farmers are required to be covered for at least the amount of crop loan sanctioned/advanced for notified crops under the MNAIS, which may be extended up to the value of the insured crop’s threshold yield at the insured farmers’ discretion. Up to 150 percent of the value of the threshold yield/normal sum insured can be chosen as the maximum sum insured.