Crop Insurance is a comprehensive crop-based policy aimed at compensating farmers' losses arising from production problems. It includes pre-and post-harvest losses due to heavy rains and lack of rainfall. These losses lead to lower crop yields and, therefore, affect farmers' incomes. In India, plant insurance is provided in the form of the Pradhan Mantri Fasal Bima Yojna.
What is Pradhan Mantri Fasal Bima Yojna?
Pradhan Mantri Fasal Bima Yojna is a plant insurance scheme sponsored by the Government of India. This policy was introduced in 2016. It aims to provide financial assistance to farmers in the event of loss or injury. Therefore, it helps to reduce farmers' stress and keep them motivated to continue farming as a profession.
Risks included in this program include protection of sowing or planting of seeds, damage to a standing plant due to unavoidable risks such as drought, flood, landslides, etc., and post-harvest losses. This policy can be purchased from a selected set of insurance companies such as SBI General Insurance and HDFC Ergo General Insurance.
Types of Crop Insurance
Harvest insurance is divided into three categories:
• Multiple Peril Crop Insurance: Provides financial coverage to manage risks from weather-related losses, such as floods, droughts, etc.
• Real Production History: Includes losses due to wind, hail, insects, etc. It involves the introduction of low yields and compensates for the difference between the balance and the actual.
• Crop revenue generation: This is not only based on yield profits but also on the amount of revenue earned from the product. When crop yields fall, the difference is compounded by this type of crop insurance.
Covered things under Crop Insurance
The following categories of crop losses are included under plant insurance:
• Local disasters: Includes local disasters and hazards such as hail, landslides affecting isolated farms in the notified area
• Risk of sowing/planting/germination: Any planting or sowing problem due to lack of rainfall or adverse seasonal conditions
• Stable crop losses: Complete risk insurance to cover crop losses due to unavoidable hazards, such as dry spells, floods, hail, hurricanes, storm
• Post-harvest loss: Cover up to a loss of up to two weeks from harvest.
Not covered things under Crop Insurance
Excluded are circumstances that are not covered or that are not required by the insurance policy. The insurance provider is not liable to pay if the loss occurs due to the following conditions:
• Loss from war, nuclear accidents
• Dangerous injuries and other preventable risks arising from negligence on the part of the farmer or by employees employed by the farmer
• Burning of crops at the behest of community officials
• Damage caused by birds or animals
• Eliminate radiation or nuclear pollution
• Harvested plants are collected and collected before threshing
How Do Crop Insurance works?
• The policy seeker can get his or her food crops, oilseeds, seasonal crops protected under plant insurance by submitting the required documents and paying the applicable fees
• However, one has to choose a policy after taking a risk assessment and comparing policies with different companies
• The amount of insurance will be determined on a variety of factors, such as the type of crop, location, and the age of the disaster in the area, and historical yield data
• In the event of crop losses, insurers need to contact the insurance company or local agricultural department within 72 hours of the disaster.
• Claims under plant insurance are made for local losses, post-harvest losses, mid-year disasters, and the most widespread disasters. Therefore, payments will be calculated taking into account factors such as climate and production per hectare
• Planting insurance can be obtained from farmers including shareholders and tenants as long as they grow locally recognized crops.
• Lending farmers also have the right to benefit from crop insurance benefits when providing land titles
• Two more categories have been identified where farmers can benefit. These are also called Types of Integrated Consolidation and are:
Compulsory: If farmers apply for a loan or Seasonal Agriculture Operations (SAO) or loans from a recognized crop finance institution, they will be charged forcibly.
Voluntary Part: Crop insurance can choose from those farmers who fall under non-borrowing farmers. If they wish, they can register and receive benefits from the government program.
Procedure to claim a Crop Insurance in India
There are two cases in which a claim can be processed - I) Widespread Disasters and II) Local Disasters,
In the first case, the company will adjust the payment of the claim when the government discloses the actual yield information. The company will directly settle the claim with the insurers without getting any closer to the policyholder.
In the case of local harassment, the insurer (eg farmer) is required to approach the company within 24 hours of the event. This can be done through the relevant financial institution or directly.
Documents Required for Processing Claim
Some of the key documents required by farmers to apply for crop insurance are listed below:
• Properly completed application form
• Land Registration Documents or Land Patta Number
• Land Title Deeds
• Aadhar Card
• Proof of personal identification such as a share card, PAN Card, and/or voting card
• Bank Account details
• Proclamation of Sowing
• Claim Payment Form or Application Form
Time Taken to Resolve Claims
Generally, the insurance company resolves the claim within 30-45 days before the end of the annual crop accident period once all the required documents have been submitted to the insurance company.
This insurance itself needs to renew its plant insurance policy by doing it online or by visiting the branch directly. The person also needs to make sure that the premium must be paid to the company before the due date
List of companies that provides Crop Insurance in India
Some of the insurance companies that offer crop insurance in India are:
• Tata AIG General Insurance
• Reliance General Insurance
• IFFCO-Tokio General Insurance
• Bajaj Allianz General Insurance
• SBI General Insurance
Benefits of Crop Insurance
Let's look at some of the benefits of buying plant insurance:
• Provides financial support to farmers thereby, including crop losses and damage caused by unforeseen events
• Non-taxation of the premium paid by farmers when purchasing a plant insurance policy
• Farmers will have peace of mind as they do not need to take out loans from private lenders at high-interest rates.
• Encourages farmers to use modern and innovative farming methods that increase their income
• The country's economy will be stronger as farmers will be able to repay loans with crop repayments from crop insurance.