Agricultural insurance in india vis-à-vis in Haryana: problems and prospects
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Date
2020-07
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CCSHAU, Hisar
Abstract
The present investigation was carried out to study price and yield risk involved in different crops at national and state level, performance of the existing and earlier national agricultural insurance scheme, awareness and knowledge of respondent farmers towards crop insurance schemes, and problems and prospects of agriculture insurance schemes. The required secondary data on production and prices of insured crops were collected from secondary sources. Primary data pertained to Haryana state, which divides into three clusters. Multistage random sampling used and total 240 respondent farmers (120 insured and 120 non-insured) were selected for conducting the study. In case of wheat, area and production followed declining trend and became more stable after Green revolution period. But, in case of wheat at all India level, yield risk were maximum volatile and its value shot up more than 100 per cent, respectively. Further, the instability of yield in case of India rose due to frequent severe droughts during 1981-82 to 2003-04. In case of Bajra, overall risk in area was highest among all the principal crops (i.e. approx. 11%). So, in case of Haryana, gram showing the maximum overall risk in area and production (45.69% and 70.29%) among other crops. Gram has been observed to be the riskiest crop in respect of production as well as yields. This understand the need for addressing risks in farm income by devising area-specific crop insurance or other suitable mechanisms and implementation of Pradhan Mantri Fasal Bima Yojana (PMFBY) in year 2016 is an important tool in addressing this issue. The study revealed that age of the respondent did not show any significant difference between borrower and non-borrower. Respondent farmers suggested for improving existed scheme and they want quick settlement of claims which is usually taking more time. Risk factors faced mostly in agriculture are drought, flood, fire etc. Overall majority of the borrower had opted the Banks/ financial institutions compulsion as the top most motivating factor for taking crop insurance i.e. 35.83 per cent. Second position was taken by the benefit of insurance (26.66%) for their motivation. No one gave others option as motivation factor. Constraints generally faced by the borrower farmer like delay in claim settlement (25.83%), inaccurate yield estimation (20.83%), inadequate implementation (20.00%), delay in claim settlement (25.83%), lack of awareness about the scheme and exclusion of a malicious damage, theft and grazed and destroyed by domestic animals etc. as 3.33 per cent. as major constraints. Further, the claim premium ratio in First Individual Approach Scheme was 8.34, indicating that for every one rupee of premium collected; the scheme paid Rs 8.34 in claims. It means high out go in the scheme. The benefits of CCIS were highly skewed towards few states and many more drawbacks found in different schemes. Under PMFBY from kharif 2016 to kharif 2017, there has been a significant increase in the number of gross premiums, claims paid and farmers benefitted: 21 per cent, 64 per cent and 29 per cent, respectively. The difference between gross premium and claim paid/compensation paid in the Kharif season has reduced and indicated a divergence in the data on the disbursement of claims and the profits made by private insurance companies. While the negative effects, the number of insured farmers has declined by 14 percent from Kharif 2016 to Kharif 2017, and the total area insured has decreased by ten percent over the span of one year. Likewise, from kharif 2017 to kharif 2018 no. of insured farmers has declined further by 4 per cent, and the total area insured has decreased by seven per cent. However, there has been a significant increase in the number of gross premiums as 45 per cent. The PMFBY has therefore failed to achieve its main targets, i.e. increasing the area and the number of farmers insured. Awareness must be created among farmers regarding different insurance schemes available to farmers, procedure for insuring the crops, methods of loss assessment and compensation determined etc. to tackle the problems.