Agri Insurance

Agri-insurance regulatory to monitor agricultural insurance

Agri expert said, "There is a need for a regulatory body along the lines of the Insurance Regulatory and Development Authority to monitor firms offering agricultural insurance."

“Many problems associated with the growing agricultural insurance sector can be solved if there is a strong oversight body,” said a senior official with a public sector insurance company involved in agricultural insurance.

Even though the national flagship insurance scheme — Pradhan Mantri Fasal Bima Yojana (PMFBY) — insists that insurance firms offering agricultural insurance have to have offices at block levels, such penetration is non-existent in most cases.

“Currently, only Tamil Nadu and Madhya Pradesh have given a long-term contract of three years to crop insurance firms. Ideally, an insurance firm should be allowed to work in a region for three to five years. This will help them develop infrastructure,” the industry source said.

Multifarious aspects :
Inclusion of crop destruction by wild animals under the insurance scheme is under active consideration.

Similarly, a beginning has been made in the case of offering insurance cover to non-loanee farmers. They can take insurance cover for crops notified by the State governments, if applied through Common Services Centres.

Paucity of data :
The agri insurance sector encounters is the lack of proper crop cutting experiment (CCE) data, which are vital for assessing crop damage. For an operation such as PMFBY, there is a need for nearly 8 lakh CCEs, four times more than what is done currently.

According to the official, more often than not, most complaints of farmers not being paid compensation on time was because the States do not pay their share of premium subsidy on time.

In Madhya Pradesh, for instance, the expected premium subsidy was ₹1,485 crores, which is 60 per cent of its total agriculture budget of 2,448 crores in 2016-17.

High claim level:
For instance, certain districts in Karnataka have had claims that are several-fold higher than the premium they paid. Claims in Mandya, for example, were 630 per cent of total premiums paid, Chitradurga was 408 per cent and Mysuru, 406 per cent.