KEY POINTS

Despite large payouts, there is a negative perception regarding crop insurance schemes, primarily because there have been issues regarding claims assessment, settlement and quantum.

Quicker claims settlement

·        There is a need to focus further on using technology to the desired extent through GPRS-enabled phones for conducting and managing large number of crop cutting experiments (CCEs) in a limited time period.

·        Satellite imagery used systematically as in a pilot scheme can enable a reduction in the number of CCEs required.

Distribution and intermediation

·        In the current top-down approach, the engagement of the farmers is limited while obtaining the coverage.

·        By utilising a distribution network of the insurers and intermediaries, a better understanding can be developed and expectations rationalised.

Process improvements

·        Mobile money and all payments systems should be integrated with the crop insurance coverage to enhance the ability of a farmer to take a crop insurance cover directly with some measure of flexibility.

Price risk

·        Development of warehousing and cold chains and providing insurance coverage for the storage and deterioration of stocks can also contribute effectively to the reduction of price risk for farmers.

Utility for farmers

·        The Rs 6000-payment under the PM-Kisan can additionally reimburse the insurance premium payment as an add-on, so that the farmer takes direct responsibility for obtaining the insurance coverage and protecting his income.

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