Weather based crop insurance for risk management in agriculture

Abstract


 In recent years, in many parts of the country, indebtedness, crop failures, unpaid prices and poor returns have resulted in agrarian distress. The government has identified and introduced several programs to address these critical issues viz. crop insurance, lending waivers etc. among them. Crop insurance as a concept for risk management in agriculture has emerged in India since the turn of the twentieth century and government has launched various insurance schemes in last three decades like Comprehensive Crop Insurance Scheme (CCIS), National Agricultural Insurance Scheme (NAIS) and Modified NAIS (MNAIS) etc. Apart from these schemes, several other pilot projects such as Seed Crop Insurance, Farm Income Insurance Scheme and Weather Based Crop Insurance Scheme (WBCIS) were implemented from time to time. At present, two most important schemes are functional i.e. Pradhan Mantri Fasal BimaYojna (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS) are in operation. This study focused on the performance of the Restructured Weather based Crop Insurance Scheme (RWBCIS) from historical and analytical perspectives and presents recommendation for future scenarios. RWBCIS scheme having two most important challenges. Firstly, weather data related issues by designing a modern scientific approach to develop high resolution secondary data and secondly, modifying the existing design of RWBCIS Products, based on sound agronomic principles.

Insights into Crop Insurance in the Agriculture Industry in India: An Overview

“…Currently two crop insurance schemes are operational: the Pradhan Mantri Fasal Bima Yojana ( 2016) and the Restricted Weather-Based Crop Insurance Scheme (Kaur et al, 2021;Vishnoi et al, 2020). W ith the help of these insurance schemes climate-related crop risks in agriculture production are insured (Singh et al, 2018).…”

The Dynamic Impacts of Weather Changes on Vegetable Price Fluctuations in Shandong Province, China: An Analysis Based on VAR and TVP-VAR Models

“…Cui et al [20] empirically proved the impacts of climate change on agricultural economy, showing that, on average, climate change would decrease yields and raise prices and that climate change had led to an increased uncertainty in forecasting agricultural economies. Increasing climate change enhanced the risk on agricultural production and prices, and the design and implementation of weather-based agricultural insurance has become more important in response to sudden weather disasters, especially in developing countries [21][22][23][24].…”

Impact of Restructured Weather Based Crop Insurance Scheme on Grape Beneficiary Farmers

“…However, despite large public subsidy, a significant majority of India's farmers have remained uninsured largely due to issues in design, particularly the long delays in claims settlement [6] and high basis risk. Unfortunately, agricultural insurance in the country has not made much headway even though the need to protect farmers from agriculture variability has been a continuing concern of agriculture policy [7].In view of challenges in implementation of NAIS, MNAIS &WBCIS(previous crop insurance schemes), specially delay in settlement of claims, low risk coverage in terms of reduced sum insured due to capping in MNAIS & WBCIS, huge difference of farmer premium in neighbouring districts, low transparency in calculation and settlement of claims, fragmented information with different stakeholders, the Government of India reviewed the erstwhile Crop Insurance schemes [8] and came up with two most relevant systems in the recent past, i.e. Pradhan Mantri Fasal Bima Yojna(PMFBY) and Restructured Weather based Crop Insurance Scheme (RWBCIS) based on restructured weather.…”