Agricultural Insurance
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Agricultural Insurance
ag-ri-kuhl-chur-al in-shur-ans
Agricultural insurance provides financial protection to farmers against losses related to farming.
It covers risks like crop damage, livestock loss, or damage to farm assets due to events such as drought, floods, pests, diseases, or extreme weather.
In simple terms, it acts as a safety net for farmers when things go wrong.
This type of insurance helps:
• Protect farmers’ income
• Reduce financial uncertainty
• Encourage investment in farming
• Improve access to loans and credit
In India, schemes like Pradhan Mantri Fasal Bima Yojana (PMFBY) provide subsidised crop insurance to farmers. These schemes cover losses due to natural events like droughts, floods, and hailstorms.
Types of agricultural insurance:
• Crop insurance (based on yield or weather conditions)
• Livestock insurance
• Aquaculture and poultry insurance
• Farm equipment insurance
Suresh, a 48-year-old farmer from Maharashtra, grew cotton on his 10-acre farm and enrolled in PMFBY.
He paid a small premium (around 2% of the insured amount), while the rest was subsidised by the government. That year, unseasonal rains damaged a large part of his crop just before harvest.
The insurer assessed the loss using crop data and satellite inputs, and ₹60,000 was credited directly to his bank account. This helped him recover from the loss and prepare for the next season without taking on extra debt.
Comprehensive Crop Insurance Scheme (CCIS)
PMFBY launched
voluntary for farmers
Definition
Agricultural insurance provides financial protection to farmers against losses related to farming.
It covers risks like crop damage, livestock loss, or damage to farm assets due to events such as drought, floods, pests, diseases, or extreme weather.
In simple terms, it acts as a safety net for farmers when things go wrong.
This type of insurance helps:
• Protect farmers’ income
• Reduce financial uncertainty
• Encourage investment in farming
• Improve access to loans and credit
In India, schemes like Pradhan Mantri Fasal Bima Yojana (PMFBY) provide subsidised crop insurance to farmers. These schemes cover losses due to natural events like droughts, floods, and hailstorms.
Types of agricultural insurance:
• Crop insurance (based on yield or weather conditions)
• Livestock insurance
• Aquaculture and poultry insurance
• Farm equipment insurance
Case Study
Suresh, a 48-year-old farmer from Maharashtra, grew cotton on his 10-acre farm and enrolled in PMFBY.
He paid a small premium (around 2% of the insured amount), while the rest was subsidised by the government. That year, unseasonal rains damaged a large part of his crop just before harvest.
The insurer assessed the loss using crop data and satellite inputs, and ₹60,000 was credited directly to his bank account. This helped him recover from the loss and prepare for the next season without taking on extra debt.
Historical Reference
Comprehensive Crop Insurance Scheme (CCIS)
PMFBY launched
voluntary for farmers
Illustration
