Improved crop insurance

Improved crop insurance: Watch implementation of new farm insurance scheme


20, 2016
This refers to your
editorial “Improved crop insurance” (Business Standard, January 20). Earlier initiatives in certain
states to introduce crop insurance did not take off, or success was limited,
for want of other linkages and half-hearted approach to the whole concept. This
time around, Centre-state participation and overall awareness about the need to
make farming a ‘bankable’ activity in its own right should make a difference.
Centre and states should revisit all subsidies now being provided to farm
sector, like interest subsidy, subsidised inputs and concessions in cost of
electricity and ideally pool them and provide need-based subsidy to make
individual farming activities economically viable.
Though going back to old
practice of three components (A-Cash, B-Kind, provision of inputs and C- A
consumption component in gross bank credit) may not be practical, human involvement
in appraisal and supervision of credit cannot be substituted by technology
while providing bank credit to farm sector. There is imperative need for close monitoring and supervision through
bank and insurance staff as the inadequacy of field level supervision at
different levels, had contributed to the failure of earlier insurance schemes.
Here, the temptation to ‘outsource’ and depend on paperless reporting alone
should be avoided.
The problems listed in the concluding paragraph of the editorial are
real. But, over time, insurance companies are also waking up to real life
situations and let us hope where banks find the activity bankable, insurance
cover will not be denied for want of ‘unflawed land title’. It is in the
interest of insurance companies also to establish credibility in the scheme, so
that there is wider coverage which allows cross-subsidisation of outgo for
claims settlement. Awareness should be created among farmers about the role of
insurance as an instrument of savings to meet unexpected risks.

M G Warrier, Mumbai 


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