India is an agriculture-based country and approximately half of its population is involved in it. Harmful situations like bad weather, erratic rainfall, pest attack, and humidity affect agricultural products and this is the common problem here. Therefore, it is essential to get a crop insurance policy to get coverage for agricultural production and production-based losses. Getting an insurance policy for crops is the best way to decrease the stress of farmers and boost their welfare. Weather is the main issue for the agriculture industry as it destroys the crop. Therefore, to protect from these types of issues such as drought, flood, fires, thunder, etc. crop insurance is one of the best protection systems for the farmers.Read more
Crop insurance is a kind of insurance policy that provides protection and coverage against market contingent profit’s loss from product sales at the project crop yields or market.
The crop insurance can be divided into two parts – crop revenue and crop yield. The crop revenue insurance policy protects expected revenue from the losses caused due to market fluctuations in the selling price of crops. On the other hand, the crop yield insurance policy covers the expected revenue that gives unexpected yields and this is the harvested crop volume. Both these parts of crop insurance provide disaster recovery from unexpected events.
There are many types of crop insurance plans available in India and some of these are as follows:
Under this type of crop insurance policy, coverage against plant-related disease, insects affects the crop at a large level so that the insurance policy compensates all the losses in estimated and actual.
Under this type of crop insurance policy coverage against losses or damages caused to the crops due to natural disasters that included wind, excessive moisture, hail, drought, insects, frost, and disease are covered. For validating any claim, the farmers must purchase this crop insurance plan before planting.
Under this type of crop insurance plan, losses that incur after the harvest are covered. This means if the prices of the crop drop because of government policy or economics, then in that situation, the insurance compensates fair price.
A crop insurance policy in India is offered under the name of Pradhan Mantri Fasal Bima Yojana. This insurance scheme is sponsored by the Indian government and was introduced in the year 2016. The main aim of this insurance policy is to reduce the financial burden on farmers’ shoulders due to crop damage and loss. In this scheme risks like preventing plantation of seeds or sowing, losses after harvest, damages in the standing crop because of non-preventable threats such as flood, drought, landslide, etc. are included. One can buy this insurance policy from any general insurance provider.
There are many stages under which crop loss occurs that is covered under a crop insurance policy in India, which are mentioned below:
Some conditions or situations are not covered in a crop insurance policy. The insurance company does not pay the claim in these conditions, some of which are:
Most farmers including the tenant farmers and sharecroppers are eligible to avail the benefits of crop insurance as they are growing the crops in the notified areas. A farmer who does not have any kind of loan can as well apply for the crop insurance policy by providing all the required legal documents for land. Apart from these, there are two more categories available under which farmers are eligible for perks. These categories are also called as a kind of coverage components:
The claim can be filed for a crop insurance policy in the below-mentioned scenarios, which are:
A policyholder or a farmer has to provide the following documents to the insurance company while filing a claim:
The claim gets settled within 30 to 45 days before the seasonal crop ends period. The insurance company settles the claim when the important documents are submitted by the insured farmer.
The Final Words!
Crop insurance is essential for farmers. It not only covers the loss or damages to the crop but also provides financial support. The farmers who take this insurance can get peace of mind as they do not need to take loans from the lenders at a high rate of interest. So, overall it is a deal of benefit for the farmers.
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