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Agriculture insurance sector needs advance technology; here’s why

9 5 3

-Sanjiv Nair

The Pradhan Mantri Fasal BimaYojna (PMFBY) was a bold attempt to provide a social security framework to a wider group of farmers. Agriculture insurance had been tried in a number of avatars but they were never meant to support farmers and instead provided a safety net for bank lending to the farm sector. In all these years, there was no attempt to educate the farmers and explain the logic of insurance, its premium amounts and the extent and circumstances of coverage. As a result, agriculture insurance did not engage large numbers and grow as a product.

In order to cover a larger number of farmers, as a genuine social safety net, the technology component was to form the backbone for covering large areas and reducing human intervention and arbitrariness. Real time monitoring of areas, conditions of the crop and increasing productivity was to be possible once the technology framework was developed and put in place. This was an important step for protecting farmers in areas where there are no assured means of irrigation and crops are dependent on rainfall. It would permit monitoring of multiple parameters such as soil moisture, plant canopy water, crop health and would ultimately track crop loss. In case of a drought, this would facilitate early compensation for crop loss, in order to recuperate the upfront investment of the farmer.

Other weather events such as floods, blight, disease or hail are a constant threat to crops. However, the interesting aspect is that they can have varying impacts in the same area. Flooding can have varying affects........

© The Financial Express