A Complete Information About Crop Insurance in India

A Complete Information about Crop Insurance in India

Agriculture is an economy-based sector that involves a large amount of population. Harmful conditions like weather, pest attack, erratic rainfall and humidity affecting agricultural produce are common problems in India. Hence, it is imperative to get coverage as crop insurance for production and production-based losses. Crop insurance is the best way to decrease farmer’s stress and to boost their welfare. Weather is the main problem for farmers that destroy the yield crop, so to protect from such types of issues like a flood, drought, thunder, fires etc., crop insurance is the best protection system for farmers. 

Want to know about crop insurance, then do follow the blog as this blog is completely dedicated to crop insurance information. This blog provides proper help to understand crop insurance to all farmers, especially new age farmers who have done farming for the first time. So keep with this blog till the end. 

What Is Crop Insurance? 

What Is Crop Insurance

Crop Insurance is a type of policy that protects or covers agricultural producers against contingent loss of profits from product sales at the market or projected crop yields. 

The insurance of crop divided into two parts – crop revenue and crop yield. Crop yield insurance covers the expected revenue given unexpected yields, and it is the crop volume harvested. Crop revenue insurance protects expected revenue from the losses from the market fluctuations of crop selling prices. Both are the types of insurance that support disaster recovery for unexpected events. 

As you all know, the future is unpredictable. Maybe it is in favour, perhaps not. To protect against loss from natural disasters, which are drought, floods, thunder, hurricanes, fires, earthquakes, pandemic, etc., or loss of revenue due to fall in prices of agricultural commodities. These all compensated by crop insurance.

Types of crop Insurance

Types of crop insurance

Many types of agriculture insurance followed in India. Check out below. 

 1. Multiple peril crop insurance (MPCI) 

Multiple peril crop insurance covers against causes from natural disasters that included excessive moisture, wind, drought, hail, insects, disease and frost. The farmer should purchase this policy before planting to validate any possible claims. MPCI processed under the Federal Crop Insurance Program, a public-private partnership between the federal government and 15 private insurers. The US Department has approved these 15 private insurers of USDA RMA (Agriculture Risk Management Agency). The premium rates of many peril insurance distributed through insurers in the Federal Crop Insurance Program set by the Risk Management Agency (RMA).

For that, you have to select the amount of average yield that you want to cover. You can insure around 50% to 75%, and in some areas, it is 85%. In the second case, you can forecast crop price, under 55% to 100%. The price is set annually by RMA. 

2. Actual production crop insurance 

Insects, plant-related disease affect the crop in large levels so that the insurance compensates loss in actual and estimated.

3. Crop revenue coverage 

Its cover post-harvest losses mean if the prices fall due to economics or due to government policy, then in that condition, fair price is compensated by the insurance.

Pradhan Mantri Fasal Bima Yojna

Crop insurance in India offered as Pradhan Mantri Fasal Bima Yojna. This crop insurance scheme sponsored by the Indian government and launched in 2016. The company’s main aim is to reduce farmer’s financial burden in crop loss or damage. In this scheme, risks such as preventing sowing or planting of seeds, post-harvest losses, damage to the standing crop due to non-preventable threats like drought, flood, landslide, etc., are covered. This policy can be bought from the insurance companies such as SBI General Insurance and HDFC Ergo General Insurance.

What is Crop Insurance Covers? 

There are many crop loss stages available covered under agriculture insurance in India, which defined in the below section. 

  • Localised Calamities – This stage covers localised calamities and risks such as landslide, hailstorm, etc. These disasters affected isolated farms in the notified areas. 
  • Risk of Sowing/Planting/Germination – It covers problems in of sowing, planting, germination due to heavy rainfall or unfavourable seasonal conditions
  • Loss of Standing Crop – This insurance covers yield losses due to non-preventable risks, such as dry spells, flood, hailstorm, cyclone, typhoon. 
  • Post-Harvest Loss – This stage covers all the post-harvest losses for up to a maximum period of 2-weeks. 

What Are The Functions of Crop Insurance? 

There is a proper way which shows the crop insurance function. In the below section, we show crop insurance functions with appropriate detailing. 

Firstly, the policy seeker evaluates the risks and compares different policies and companies and chooses accordingly. After that, policy seekers can get insurance on their food crops, oilseeds, annual commercial crops by submitting all required documents and paying the premium accordingly. The insured amount decided on different factors like crop type, calamity year, location, and historical yield data. 

In the case of crop loss, the insured person must inform the insurance company or local agriculture department within 72 hours of the disaster. The insured person can claim based on localised failures, post-harvest loss, mid-season disaster, and widespread disasters. The pay-out will be calculated by factors such as weather and yield per hectare. 

Eligibility Criteria for Crop Insurance 

Eligibility Criteria for Crop Insurance 

Most farmers, including sharecroppers and tenant farmers, can avail of crop insurance because they are growing crops in the notified area. The non-loanee farmers can also apply for crop insurance by providing proper legal land documents. There are two more categories available in which farmers are avail for perks. These categories are also known as a type of coverage components, have a look. 

  • Compulsory Component – This category involves farmers capable of applying for seasonal farming operations (SAO) loans from any financial company for the notified crops. 
  • 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 Claim Process The Company 

The claim can process in the two scenarios:- 

  • Widespread – In this case, the company can process claim settlement when the government keeps the actual yield figures. 
  • 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

Crop Insurance Policy

Crop insurance policy is easily opted by farmers nearby insurance companies that use this insurance. The farmers require a few key documentations to make claims under insurance, shown below. 

  • Duty claim form
  • Land Registration Papers or Land Patta Number
  • Land Ownership Documents
  • Aadhar card
  • Bank details
  • Personal identification proof such as pan card or voter card
  • Land ownership paper
  • Sowing Declaration
  • Claim Reimbursement Form or the Application Form

Within 30-45 days before the end of the seasonal crop’s risk period, the claim settled by the company with the condition that the important documents have been submitted to the company. 

Exclusions Conditions

There are many exclusion conditions available that not covered by crop insurance. The company is not able to pay for the following conditions. 

  • Losses occur due to war and nuclear risks. 
  • The company ignores preventable risks and farmer’s negligence.  
  • Crop burning due to the involvement of public authority. 
  • Losses occur due to birds and animals. 

Crop Insurance Companies 

Crop Insurance Companies 

 

Many crop insurance companies in India work in this field. Some of them are government companies and some private companies. Even private sector companies play a vital role in the insurance field. They provide lots of facilities effectively and easily. Popular agriculture insurance company of India are 

  • Tata AIG General Insurance
  • Reliance General Insurance
  • IFFCO-Tokio General Insurance
  • Bajaj Allianz General Insurance
  • SBI General Insurance

Benefits of Crop Insurance

Crop Insurance for farmers is very important and beneficial. There are benefits of insurance to farmers which explained below. 

  • 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. 

These are the complete information about crop insurance which help when you take insurance and during a claim. We hope you liked this blog and happy after reading it. For more queries or information, you have to follow or stay connected with Tractor Junction

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