Crop Insurance in India: There is a large number of people involved in agriculture, which is an economy-based sector. Indian agricultural produce is generally affected by harmful conditions such as erratic rainfall, pest attacks, and erratic weather. Therefore, crop insurance is essential to cover production and production-related losses. Farmer’s welfare can be boosted by crop insurance by reducing their stress. For farmers, weather is the main problem that destroys their crop, which is why crop insurance is the best protection against such issues as floods, droughts, thunder, fires, etc.
The blog is dedicated to providing information about crop insurance, so follow it if you want to learn more about it. Especially for new farmers who have just started farming for the first time, this blog is an excellent resource for understanding crop insurance. Don’t give up on this blog.
What Is Crop Insurance?
Agricultural producers purchase crop insurance to protect against potential losses from markets or projected crop yields.
There are two parts to crop insurance – crop revenue and crop yield. In crop yield insurance, the revenue expected is based on the amount of crop harvested despite unexpected yields. The purpose of crop revenue insurance is to protect expected revenue from market fluctuations in crop selling prices. Unexpected events can be covered by both types of insurance.
The future is unpredictable, as we all know. Perhaps it is in favor, perhaps it is not. To cover losses due to natural disasters, including droughts, floods, thunder, hurricanes, fires, earthquakes, pandemics, etc., as well as revenue loss due to drop in agricultural commodity prices. Crop insurance compensates all of these.
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Insurance types for crops
In India, agricultural insurance is offered in many forms. Take a look at the following.
1. Multiple peril crop insurance (MPCI)
In addition to excessive moisture, wind, drought, hail, insects, disease, and frost, multiple peril crop insurance covers against natural disasters. It is recommended that the farmer purchases this policy before planting to ensure that any claims can be validated. Federal Crop Insurance Program, a public-private partnership between the federal government and 15 private insurers, processes MPCI. The USDA RMA (Agriculture Risk Management Agency) has approved these 15 private insurers. RMA (Risk Management Agency) sets the premium rates for many types of peril insurance sold through insurers in the Federal Crop Insurance Program.
You need to select the average yield you want to cover. Some areas allow insurance coverage of 85%, while others allow 50% to 75%. Alternatively, you can predict the crop price between 55% and 100%. RMA sets the price annually.
2. Actual production crop insurance
A large percentage of the crop is affected by insects and plant-related diseases, so insurance compensates losses in both actual and estimated amounts.
3. Crop revenue coverage
As the insurance covers post-harvest losses, it compensates fair price in the event of price drops caused by economics or government policies.
Pradhan Mantri Fasal Bima Yojna
Pradhan Mantri Fasal Bima Yojna provides crop insurance in India. An Indian government-sponsored crop insurance program launched in 2016. Farmers’ financial burdens are reduced by the company when crops are damaged or lost. As part of this scheme, losses caused by non-preventable threats like drought, flood, landslides, etc., as well as losses due to post-harvest losses will be covered. Several insurance companies offer this policy, including SBI General Insurance and HDFC Ergo General Insurance.
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What is Crop Insurance Covers?
Agriculture insurance covers many stages of crop loss in India, which are described below.
Localised Calamities : Localized calamities and risks such as landslides and hailstorms fall into this stage. In the affected areas, isolated farms were affected by these disasters.
The risk of sowing, planting, and germination : Due to heavy rainfall or unfavourable seasonal conditions, it covers problems with sowing, planting, and germination
Floating Crop Insurance : Yield loss insurance covers losses due to any non-preventable event such as droughts, floods, hailstorms, cyclones, and typhoons.
Post-Harvest Loss : Post-harvest losses are covered during this stage for a maximum period of two weeks.
What Are The Functions of Crop Insurance?
Crop insurance is shown in a proper way. We show the functions of crop insurance in the following section.
The policy seeker evaluates the risks and compares various policies and companies before making a choice. Upon submitting the necessary documents and paying the premium, policy seekers can obtain insurance for food crops, oilseeds, and commercial crops. Based on factors such as crop type, calamity year, location, and historical yield data, the insured amount is determined.
An insured person who suffers crop loss must notify their insurance company or local agriculture department within 72 hours after the disaster. A claim can be filed for localized failures, post-harvest losses, mid-season disasters, and widespread disasters. Several factors will determine the pay-out, such as the weather and the yield per hectare.
Crop Insurance Eligibility Criteria
Farmers who grow crops in notified areas, including sharecroppers and tenant farmers, can purchase crop insurance. Crop insurance can also be obtained by non-loanee farmers with proper legal documents. There are two additional categories of farmer perks. Take a look at these categories as a type of coverage component.
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The compulsory component – Farmers are able to apply for seasonal farming operations (SAO) loans from any financial institution.
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The voluntary component – This category involves farmers who fall under non-loanee farmers. As per their wish, they may apply and avail benefits from the government scheme.
How To Process A Claim With The Company
There are two scenarios in which the claim can be processed
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Widespread – In this case, the company can process claim settlement when the government keeps the actual yield figures.
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Local Calamities – In this case, the insured person needs to inform the company within 24 hours after that they can not claim.
Crop Insurance Policy
Farmers can opt for crop insurance policies from nearby insurance companies that offer this type of coverage. Below are the key documents farmers must submit to make insurance claims.
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The duty claim form
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Documents relating to the registration of land or land pattas
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Documents proving land ownership
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Aadhar card
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Bank details
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Personal identification proof such as pan card or voter card
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Land ownership paper
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Sowing Declaration
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Claim Reimbursement Form or the Application Form
Approximately 30-45 days before the end of the seasonal crop’s risk period, the company settles the claim after receiving the important documents.
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Conditions of Exclusion
Crop insurance does not cover many exclusion conditions. The following conditions cannot be met by the company.
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Losses occur due to war and nuclear risks.
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The company ignores preventable risks and farmer’s negligence.
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Crop burning due to the involvement of public authority.
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Losses occur due to birds and animals.
Crop Insurance Companies
In India, there are many companies that provide crop insurance. There are some government companies and some private companies. The insurance industry also involves private companies. Their services are effective and easy to use. India’s most popular agriculture insurance companies include
- Tata AIG General Insurance
- Reliance General Insurance
- IFFCO-Tokio General Insurance
- Bajaj Allianz General Insurance
- SBI General Insurance
The benefits of crop insurance
The importance and benefits of crop insurance for farmers cannot be overstated. Farmers can benefit from insurance in the following ways.
- Crop insurance provides financial support and covers crop loss damage.
- Farmers can get peace of mind because they don’t need to take loans from lenders at high-interest rates.
- It also reduces the risk of modern and innovative agriculture practices adoption, which are beneficial for their income.
- Crop insurance also strengthened the country’s economy because farmers can easily repay loans with reimbursement from the insurance of crop.
This is a comprehensive guide to crop insurance, which will help you when you purchase it and when you file a claim. We hope you enjoyed reading this blog and found it helpful. Aarug agro is the place to go for more queries or information.
