AN ECONOMIC ANALYSIS OF CROP INSURANCE IN RISK MITIGATION OF FARMERS IN ANDHRA PRADESH
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Date
2022-08-04
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guntur
Abstract
The study was conducted to include crop insurance data collected from the selected sample and the state of Andhra Pradesh as a whole. The selected sample consists of 30 farmers each from Peddapasapula village of Peddamudium mandal of Kadapa district, Naganathana Halli village of Adoni mandal of Kurnool district, Upputur village in Parchur mandal of Prakasam, Jaganathapuram village in Tadepalligudem mandal of West Godavari district, Tajangi village of Lambasinghi mandal of Visakhapatanam and Ammanoru village in Regidi Amadala Valasa mandal of Srikaklam, hence there are 180 farmers sampled from 6 villages. The primary data collected from the farmers was pertained to the period of 2017-18. The study consists of analysis of the performance of crop insurance in Andhra Pradesh involving data of area covered, farmers covered, farmers benefitted and insurance premium for the years 1985-86 to 2016-17. The sources of secondary data include Handbook of Statistics on the Indian Economy, Statistical Abstracts, Season and Crop Reports published by Directorate of Economics and Statistics, Government of Andhra Pradesh and NSSO Reports, Books, Journals, Periodicals, Websites etc. The collected raw data were classified and computed according to the objective requirements of the study.
The study was conducted primarily to determine the risk associated with crop production at farm level in Andhra Pradesh, the impact of crop insurance on the farm economy. The growth and performance of the Crop Insurance schemes through the years of 1985-86 to 2016-17 was studied and the constraints in adoption and implementation of crop insurance in the sampled villages and districts were analysed.
The crops raised in the sampled villages and districts were found to varying in a scale in moderate to highly by the Cudde Della Valle Instability Index. The crops that were raised rainfed showed maximum instability while the irrigated crops of West Godavari district exhibited moderate instability.
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The statistics of numbers of farmers and area covered under Crop insurance, the sum insured and premium collected were found to show steady growth from 1985-86 to 2016-17; while the claims approved and farmers benefitted from the crop insurance scheme showed frequent peaks and lows as it depends on the incidence of crop losses and extent of adoption of crop insurance scheme.
The various indicators of performance of crop insurance, such as beneficiary ratio, claims to sum insured ratio and premiums to sum insured, also showed favourable results regarding the effectiveness in operation and growth of the crop insurance schemes. While the premium to sum insured shows dismal inference on the non sustainability of the operating crop insurance.
All farming systems that had adopted crop insurance gave an optimum solution for crop production, while the cropping systems of non adopter farmers were not feasible, implying a stark contrast between the insured and uninsured. Thus crop insurance impact cropping systems of farmers in achieving optimum production according to the MOTAD model. The factors affecting the adoption of crop insurance were mostly the age of the farmer, the access to non institutional credit, size of the land holding, etc. Separate regressions were carried out for each zone to see how the various factors affected the adoption of crop insurance in these zones of differing cropping systems. In the districts of Kadapa, Kurnool, Prakasam and Visakhapatanam, the status of irrigation of the crops also favoured adoption of crop insurance. In the district of Visakhapatanam, the presence of an off farm source of income also enabled the adoption of crop insurance by the farmers. The rate of premium collected from the farmers was found to have no significant effect in the adoption or lack of it by the farmers.
The major constraints in adoption of crop insurance by the farmer were: the lack of definite demarcation of notified area, resulting in overlapping areas of coverage and the inability to disburse the indemnity on time before the next cropping season.
The major constraint in implementation of crop insurance by the Lead banks and the Mandal Agriculture office was the inadequacy in filing details regarding the farmers, which in turn affects timely disbursement of indemnity to the farmers and the unclear demarcation of the notified units of land area in the districts.
Description
AN ECONOMIC ANALYSIS OF CROP INSURANCE IN RISK MITIGATION OF FARMERS IN ANDHRA PRADESH