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Q. Crop insurance policy: The new crop insurance policy needs more efforts to achieve higher coverage.
Aug 08, 2016 Related to : GS Paper-3

Ans :

Introduction-

To provide a safety net to farmers and to boost production, last year the government launched crop insurance policy. Government has undertaken various actions to roll out policy effectively. The policy has various promising features, but it has attracted farmers, hence its coverage is far below expectation. Presently only 20% farmers in India are covered under crop insurance policy.

Reasons-

  • There is misplaced sense of confidence about the bountiful monsoon, but in reality the monsoon is not the only risk, but also looms over farming.
  • The insurance estimation (in PMFBY) is based on yield loss, which depends crucially on crop-cutting experiments (CCEs) conducted on a sampling basis.
  • Payments are slow in coming, and for the indemnity sum to correspond to the losses incurred by the individual farmer CCEs have to be skilfully done for as small a unit area as possible.
  • The new policy talks about reaching out to sharecroppers and others, it is not clear how that will be achieved.

Suggestions-

  • Weather-based insurance policy is good method. It is a straight-forward affair, since it merely compensates farmers concerned for deviation from the norm in a particular region.
  • The sector needs range of products similar to the insurance products on offer for the urban consumer. The scope of the bank-SHG linkage can be looked into.
  • Both the government and the insurance players should conduct market studies to understand the sort of insurance that farmers and sharecroppers are looking for and this could vary across regions and crops grown.

Conclusion-

Farmers in India are facing various issues. India needs a crop insurance revolution, given the livelihoods involved and the relentless exposure to risks. Hence there an urgent needs to relook in the matter and form effective policy insurance policy to enhance its coverage.


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