Daily Current Affairs – 3rd February, 2016DEVENDRA VISHWAKARMA
Insure farmers, ensure their future
Jammu: Litchi was flowering-much earlier and out of season because winter had not come and it was warmer than usual; but as the chill is setting in, the flowers are falling and there will be no fruit this summer
Bihar: Standing wheat crops were hit last fortnight by unseasonal hail and bitter cold that came after days of warmer-than-usual temperatures
Pathetic State of Insurance Awareness
Despite more than a quarter of a century of implementation- the penetration of crop insurance is not up to the mark and proportion of voluntary farmers insuring their crops is still very small.
What ails the Crop Insurance Sector?
- High Basis Risk
- Delay in Settlement of Claims
- Unattractive guaranteed yields
- Lack of adequate number of weather stations- To reflect the spatial variability in weather pattern & poor product design
- Lack of product benchmarking& uniform standards in product design
- Lack of correlation between the weather index & yield experience
Awareness: We need to understand the magnitude of the current events related to climate change happening all around the world and keep updating our preparedness plan accordingly. This can help us to stay aware of the magnitude of the possible catastrophe as well as help us stay prepared beforehand.
Requirement of insurance for an increasingly climate-vulnerable world: It is important to formulate a working plan for the poor, who have little collateral and faces the highest risk. The new crop insurance policy called Pradhan Mantri Fasal Bima Yojana (PMFBY), which will replace the existing national agricultural insurance scheme, can be considered a step ahead in addressing some concerns. But there is a long way to go to design a universal insurance scheme, which can be an effective safety net for farmers.
Proper estimation of Crop Damage: Estimating the crop damage accurately and then paying for the claim without fuss and delay is still a sought after phenomena in India. In PMFBY the insurance unit is now a village, as against the revenue administrative unit of a block in the previous scheme. A block covers a large area with sub-regional variations in weather events. Therefore, if it rains heavily in a few villages but not across the block, then farmers would not be able to claim damage without evidence to show this anomaly. Therefore, the geographic risk to be addressed goes down with enormous cost implications with weather stations recording this anomaly in a grossly inadequate manner
System of verifying claims: State governments are expected to conduct crop-cutting experiments to estimate what would be the actual yield as well as conduct the estimation of the loss. These experiments are often poorly done and do not give real value of the produce. Then, when the claim is filed, the assessment is done by the patwari, the lowest revenue official in the district who is expected to visit and estimate damage and thus starts the tale of corruption.
- There is a need for the increased usage of new technologies-remote-sensing to mobile-based image-capturing systems. For example, technologies like the Terrestrial Observation and Prediction System (TOPS), a modelling framework that assimilates data from earth-orbiting satellites and ground weather stations and creates spatial continuous grids at 1km resolution can be helpful.
- Also, the use of mobile phone to improve yield data and timeliness of processing claims has been portrayed to be the ultimate warrior to deal with problems of delays.
- Insurance coverage has to be universal and pay-outs should be enough to cover the losses. An exclusive institutional set-up is thus, vital for designing farmer centric insurance products
“The Pradhan Mantri Fasal Bima Yojana”
- Replaces the existing National Agricultural Insurance Scheme (NAIS) and Modified NAIS (MNIAS)
- In line with One Nation – One Scheme theme
- Lowest premium rate
- Inundation— Included under localised risk cover
- Post-harvest losses arising out of cyclone and unseasonal rain have been covered
- Emphasis on mobile and satellite technology to facilitate accurate assessment and quick settlement of claims
Thus, incorporates the best features of all previous schemes and at the same time, all previous shortcomings/weaknesses have been removed