Agriculture, the backbone of the Indian economy, faces various challenges like unpredictable weather, pest infestations, and erratic climatic conditions. In a bid to mitigate the distress faced by farmers due to crop losses, crop insurance emerges as a crucial safety net. This article explores the world of crop insurance, focusing on coverage, the claim process, and the renewal mechanism.
What is Crop Insurance?
Crop insurance is a comprehensive policy designed to compensate farmers for losses incurred during the production process. It addresses pre-sowing and post-harvest losses caused by factors such as cyclonic rains, rainfall deficits, and other production-related issues. In India, the prominent scheme is the Pradhan Mantri Fasal Bima Yojna.
Understanding Pradhan Mantri Fasal Bima Yojna
Launched by the Government of India in 2016, this scheme provides financial assistance to farmers in cases of crop loss or damage. Its goal is to alleviate the financial burden on farmers, ensuring their continued engagement in agriculture.
Types of Crop Insurance
- Multiple Peril Crop Insurance: Provides coverage for weather-related losses.
- Actual Production History: Covers losses due to wind, hail, insects, etc.
- Crop Revenue Coverage: Based on total revenue generated from the crop yield.
Coverage of Crop Insurance
- Localized Calamities: Covers risks like hailstorms and landslides affecting isolated farms.
- Sowing/Planting/Germination Risk: Addresses problems in planting due to deficit rainfall or adverse seasonal conditions.
- Standing Crop Loss: Comprehensive coverage for yield losses due to non-preventable risks.
- Post-Harvest Losses: Covers losses for up to two weeks after harvesting.
How Crop Insurance Functions
- Policy seekers can insure crops by submitting necessary documents and paying the premium.
- The insured must choose a policy after evaluating risks and comparing options.
- Sum insured is determined based on factors like crop type, location, calamity history, and historical yield data.
- In case of crop loss, the insured must inform the insurance company or local agriculture department within 72 hours.
- Claims are processed based on localized losses, post-harvest loss, mid-season calamities, and widespread calamities.
Eligibility Criteria for Crop Insurance
- Farmers, including share croppers and tenant farmers, growing notified crops are eligible.
- Non-loanee farmers can avail benefits by providing land documents.
- Two components: Compulsory for loanee farmers and voluntary for non-loanee farmers.
Claim Process
- Two scenarios: Wide Spread Calamities and Local Calamities.
- Claim settlement based on actual yield data for wide-spread calamities.
- For local calamities, the insured farmer must inform the company within 24 hours through the financial institution or directly.
Documents Required for Claim Process
- Duly completed claim form.
- Land registration papers or land patta number.
- Land ownership documents.
- Aadhar card.
- Personal identification proof (ration card, PAN card, voter card).
- Bank account details.
- Sowing declaration.
- Claim reimbursement form or application form.
Time Taken to Settle Claims
- Generally, claims are settled within 30-45 days before the end of the risk period for seasonal crops.
Exclusions in Crop Insurance
- Losses due to war, nuclear risks.
- Malicious damage and preventable risks arising from negligence.
- Crop burning ordered by public authorities.
- Damage caused by birds or animals.
- Ionizing radiations or nuclear waste contamination.
- Harvested crops bundled before threshing.
Renewal Process
- Insured individuals must renew their crop insurance policies online or at the branch.
- Premium must be paid before the due date.
Insurance Companies Offering Crop Insurance in India
- Tata AIG General Insurance
- Reliance General Insurance
- IFFCO-Tokio General Insurance
- Bajaj Allianz General Insurance
- SBI General Insurance
Advantages of Crop Insurance
- Provides financial support to farmers, covering crop loss from unforeseen events.
- Tax exemption on the premium paid.
- Reduces the need for high-interest loans from private lenders.
- Encourages adoption of modern agriculture practices.
- Strengthens the economy by enabling farmers to repay loans with insurance reimbursements.
FAQs
- How is crop loss ascertained in a particular area of land?
- Individual assessment is conducted in the insured area, considering pre-sowing and post-harvest stages along with crop cutting experiments.
- What is the premium amount for crop insurance?
- Nominal premium rates: 2% of sum insured for Kharif and 1.5% for Rabi.
- How is the maximum sum insured calculated?
- Sum insured equals Scale of Finance per hectare multiplied by the area of the notified crop proposed for insurance.
Latest News: Challenges and Progress
Many farmers may lose crop insurance benefit due to slow crop loan disbursal:
- Delay in crop loan disbursal under Prime Minister’s Crop Insurance Scheme may prevent many farmers from enjoying the crop insurance benefits given with the scheme.
80 lakh farmers received claims worth Rs. 9,046 cr under crop insurance, says Government:
- More than Rs. 9,000 crore was paid to 80 lakh farmers in the Kharif season of 2018 under crop insurance.
In a bid to reach the grassroots level, village panchayats are now involved in claim calculations, aiming to provide better financial protection to farmers.
The government is also planning to put a ceiling on crop insurance premiums, making it more affordable for farmers.
