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Proceedings Report on
“Farm Income Insurance:
Issues and Way Forward” Date: 4th September, 2014 Venue: Mahatma Mandir, Gandhinagar
Organized by Knowledge Partner Event Partner
Supported by
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CONTENTS
About the Conference .......................................................................................................................................... 3
Inaugural Ceremony ............................................................................................................................................ 3
List of Dignitaries ................................................................................................................................................ 4
Welcome Address by Shri. Babubhai Bokhiria, Hon’ble Agriculture Minister of Gujarat ......................... 5
Inaugural Address by Shri. Radha Mohan Singh, Hon’ble Union Minister of Agriculture, Government of India ........................................................................................................................................................... 6
Keynote Speech by Smt. Anandiben Patel, Hon’ble Chief Minister of Gujarat .......................................... 6
Concluding Remarks by Shri. Raj Kumar, IAS, Principal Secretary, Agriculture and Cooperation Department, Government of Gujarat ...................................................................................................... 7
Technical Sessions ............................................................................................................................................... 9
List of Speakers .................................................................................................................................................... 9
Presentation by Mr. B. S. Rahul, Deputy General Manager, Agriculture Insurance Company of India Limited ...................................................................................................................................................... 9
Presentation by Mr. Malay Kumar Poddar, Chief Financial Officer, Agriculture Insurance Company of India Limited ........................................................................................................................................... 11
Presentation by Shri. Raj Kumar, IAS, Principal Secretary, Agriculture and Cooperation Department, Government of Gujarat ........................................................................................................................... 13
Presentation by Ms. Harini Kannan, Head Agriculture - South West Asia, Swiss Re Services India Private Ltd ............................................................................................................................................................ 15
Panel Discussion:............................................................................................................................................... 17
List of Panel Members ....................................................................................................................................... 17
Presentation by Shri. Raj Kumar, IAS, Principal Secretary, Agriculture and Cooperation Department, Government of Gujarat ........................................................................................................................... 18
Presentation by Mr. P. J. Joseph, Chairman-cum-Managing Director, AICIL ....................................... 20
Presentation by Mr. P. C. James, Chair Professor, National Insurance Academy, Pune ........................ 20
Presentation by Prof. Gopal Naik, Professor, Indian Institute of Management, Bangalore .................... 21
Presentation by Mr. Mohini Mohan Mishra, National Secretary, Bhartiya Kisan Sangh ........................ 23
Concluding Remarks by Dr. Dalip Singh, IAS, Additional Secretary of Agriculture, Department of Agriculture and Cooperation, Government of India ............................................................................. 24
Question and Answer Session ..................................................................................................................... 25
Conclusion of the Panel Discussion ............................................................................................................ 26
Vote of Thanks by Dr. N. K. Singh, Managing Director, Gujarat Agro Industries Corporation Limited 28
Way Forward ..................................................................................................................................................... 29
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About the Conference
India is an agrarian economy with almost half the total employment from this sector. Hence, understandably farmers are the backbone of the Indian economy and they have right to get viable prices for their products. With this view, Government of India implemented “National Agriculture Insurance Scheme (NAIS)” covering around 35 crops during each of the Kharif and Rabi seasons. NAIS is a yield-guarantee scheme which operates on the basis of broadly homogeneous area being the unit of insurance. It is widely felt to introduce a new Farm Income Insurance Scheme to protect the farmers against both yield and price risks.
To envision the blueprint of this concept, Agriculture & Co-operation Department, Government of Gujarat in coordination with Agriculture Insurance company of India Limited (Partner Organization), KPMG (Knowledge Partner) and Radeecal Communications (Event Partner) organized a National Seminar on “Farm Income Insurance: Issues and Way Forward” at Mahatma Mandir, Gandhinagar, Gujarat on September 4, 2014 as a pre-cursor to the Vibrant Gujarat 2015 Summit. This event provided a platform to address the issues and to evolve a suitable insurance mechanism for protection of farmers against yield and price fluctuations.
The event witnessed wide participation of around 1000 delegates including representatives
from Government of India, Agriculture Secretaries and Managing Directors of Marketing
Boards of major states, Reserve Bank of India, government and private insurance companies,
nationalized banks, co-operative banks, Gramin Banks, farmers’ organization, progressive
farmers, APMCs, insurance policy experts, industry players and academicians.
Inaugural Ceremony
The national Seminar on “Farm Income Insurance: Issues and Way Forward” was
inaugurated by Shri. Radha Mohan Singh, Hon’ble Union Minister of Agriculture,
Government of India and was presided over by Smt. Anandiben Patel, Hon’ble Chief
Minister, Government of Gujarat. The event was graced by the presence of Shri. Babubhai
Bokhiria, Hon’ble Agriculture Minister of Gujarat; Shri. Nanubhai Vanani, Hon’ble Sports
Minister of Gujarat; Shri. Bhupendrasinh Chudasma, Hon’ble Minister of Education and
Food & Civil supplies, Gujarat; Shri. Pradeepsinh Jadeja, Hon’ble Minister of Law, Gujarat
and Shri. Kantibhai Gamit, Hon’ble Minister of Tribal development, Gujarat along with Dr.
Dalip Singh, IAS, Additional Secretary of Agriculture, Government of India; Dr. Varesh
Sinha, IAS, Chief Secretary of Gujarat and Shri. Raj Kumar, IAS, Principal Secretary,
Agriculture and Cooperation Department, Government of Gujarat.
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List of Dignitaries
Name Organization Designation
Shri. Radha Mohan Singh Government of India Hon’ble Union Minister of Agriculture
Smt. Anandiben Patel Government of Gujarat Hon’ble Chief Minister
Shri. Babubhai Bokhiria Government of Gujarat Hon’ble Agriculture Minister
Shri. Nanubhai Vanani Government of Gujarat Hon’ble Sports Minister of Gujarat
Shri. Bhupendrasinh Chudasma
Government of Gujarat Hon’ble Minister of Education and Food & Civil supplies
Shri. Pradeepsinh Jadeja Government of Gujarat Hon’ble Minister of Law
Shri. Kantibhai Gamit Government of Gujarat Hon’ble Minister of Tribal development
Dr. Dalip Singh, IAS Government of India Additional Secretary of Agriculture
Dr. Varesh Sinha, IAS Government of Gujarat Chief Secretary
Shri. Raj Kumar, IAS Government of Gujarat Principal Secretary to Government of Gujarat, Agriculture and Cooperation Department
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Welcome Address by Shri. Babubhai Bokhiria, Hon’ble Agriculture Minister of Gujarat
Hon’ble Agriculture Minister of
Gujarat, Shri. Babubhai Bokhiria,
started off the event by welcoming all
dignitaries on the dais and the
participants. He stressed on ensuring
stability in farm income as
agriculture is the main source of
income for almost half of the total
population. He further explained that
with insured income the farmer can
use newer technologies and resource
which will eventually lead to their
betterment. He briefed the audience
on the initiatives and achievements by Government of Gujarat for the benefit of the farmers.
He said that with the help of check dams, Khet Talavavadis, soil health cards, and Sujlam
Sufalam Yojana; the state has managed to achieve the growth rate of more than 10% in
agriculture sector in the past decade.
In addition, he informed the participants that Gujarat government has made the Crop
Insurance Scheme more transparent with the help of online tools and software at disposal.
He further stated that to promote the agriculture sector in the state, the year 2014-15 will be
celebrated as ‘Krishi Vikas Varsh’ in Gujarat and went on to brief upon the recently
inaugurated Gujarat's first ever Gama Radiation Processing Facility (GRPF) in Ahmedabad
district.
Concluding his address, Hon’ble Minister thanked the organizers for the conceptualization and coordination of event on such a significant topic.
Following the welcome address, all the dignitaries on the dais were presented with fruits and agriculture products. These products, following a unique tradition started by Hon’ble Chief Minister of Gujarat, Smt. Anandiben Patel, were later distributed to the children in the Anganwadi.
The seminar was then inaugurated with the lightening of the lamp by all the dignitaries
present. A short interactive film on the topic “Farm Income Insurance: Issues and Way
Forward” was showcased to throw light on the theme of the seminar.
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Inaugural Address by Shri. Radha Mohan Singh, Hon’ble Union Minister of Agriculture, Government of India
Hon’ble Union Minister of Agriculture, Shri.
Radha Mohan Singh, in the inaugural address
stressed upon yield risk and price risk as the
two key reasons for the need of farm income
insurance. He briefed the participants on the
changing agricultural scenario in India and
appreciated the growth and development in
the agriculture sector in Gujarat. He added
that farmer faces many uncertainties in
income owing to various reasons, of which
uncertainties in weather was the major one.
He furthermore explained that just by
providing subsidies, the income of the
farmer cannot be ensured.
Moving on, he stressed upon empowering farmers as the foundation-stone of agricultural development, since farmers are the backbone of Indian economy. He explained the importance of Soil Health Card and praised the efforts made by the state government in this direction. He further mentioned that 100 mobile laboratories will be developed for soil testing and issuing Soil Health Cards across the nation. He quoted Pandit Deendayal Upadhyay by saying “Water to every farm, Employment to everyone” and pointed towards the need of better irrigation facilities. Emphasizing the need of improving the infrastructure facilities in the Krishi Vigyan Kendras, Hon’ble Minister enumerated 7 new Krishi Vigyan Kendras to be introduced in Gujarat.
He concluded the address by welcoming the concept new Farm Income Insurance Scheme.
Keynote Speech by Smt. Anandiben Patel, Hon’ble Chief Minister of Gujarat
Hon’ble Chief Minister of Gujarat welcomed all the dignitaries and participants to the event and appreciated their effort in showing such overwhelming interest. She started off her address by showing the strength of Gujarat in managing a significant growth in agriculture sector despite the intermittent droughts and the absence of perennial rivers in the state.
She pointed out that the previous insurance schemes were based on the loss faced by the
farmers rather than the actual income of the farmer. She stressed upon the need of an
insurance scheme that ensures the income of the farmer based on the investments made by
him.
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Hon’ble Chief Minister pointed
towards better infrastructure as a
vital ingredient for the agriculture
sector to flourish. She mentioned
that Gujarat government has
provided better irrigation,
transportation and electricity
facilities to farmers. She also
informed that the development of
canals has been started with the
support of farmers and major
canals will be built by 2015. She
praised the increasing involvement
of women in the agriculture and
allied sectors in Gujarat and added
that Gujarat government has
introduced several initiatives and schemes to promote the role of women in the sector.
However, speaking about the negative aspect, she appealed to the farmers not to keep their family deprived of healthy foods in attempt to save more. She also stressed upon the need of better storage facilities and indicated that the state government has decided to provide subsidies for building silos/warehouses. She also requested the dignitaries and participants to visit the International Exhibition “Agritech Asia” to get acquainted with the latest technologies in the agriculture sector. Hon’ble Chief Minister also encouraged the farmers to move towards value added services as a next step in agricultural evolution.
She enumerated the benefits of the organic farming, highlighted the emergence of a trend towards it and then encouraged the farmers towards organic farming. Furthermore, she emphasized the need of carrying out the research done by scientists for the benefit of the agricultural community and informed that Gujarat has been able to achieve such high growth in agriculture sector due to such effective practices.
Following the keynote speech, the fruits presented to the dignitaries were collected by
representatives of Anganwadi to provide them to the children.
Concluding Remarks by Shri. Raj Kumar, IAS, Principal Secretary, Agriculture and Cooperation Department, Government of Gujarat
Shri. Raj Kumar, IAS, Principal Secretary, Agriculture and Cooperation Department, Government of Gujarat concluded the inaugural session by showing the importance of agriculture as the main source of income for more than half the total population. He explained that in today’s scenario, a farmer has no control over the prices he gets by selling the crops. Hence, he further emphasized on the right of the farmers to get commensurate price for their investment and hard work. He buttressed the significance of the seminar which has been organized to provide a platform to all the experts in agriculture sector to
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discuss and evolve a suitable insurance mechanism for protection of farmers against yield and price fluctuations. He especially thanked Smt. Anandiben Patel, Hon’ble Chief Minister of Gujarat, and Shri. Radha Mohan Singh, Hon’ble Union Minister of Agriculture, for gracing the event with their presence and for providing support towards the evolution of such insurance scheme. He also extended his appreciation and gratitude towards all the dignitaries and participants for showing such enthusiasm.
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Technical Sessions
Following the inaugural session, the event showcased four technical presentations pivoted
around the basics of crop insurance schemes and challenges; crop revenue insurance and
fundamental market requirements to set up such scheme; and the analysis of pilot Farm
Income Insurance Scheme (FIIS).
List of Speakers
Name Organization Designation
Mr. B. S. Rahul Agriculture Insurance Company of India Limited Deputy General Manager
Shri. Raj Kumar, IAS Agriculture & Co-operation Department, Government of Gujarat
Principal Secretary
Mr. Malay Kumar Poddar
Agriculture Insurance Company of India Limited
Chief Financial Officer
Ms. Harini Kannan Swiss Re Services India Private Ltd.
Head Agriculture - South West Asia
Presentation by Mr. B. S. Rahul, Deputy General Manager, Agriculture Insurance Company of India Limited
Topic - The basics of Today’s Crop Insurance – Current Scenario and Challenges/ Risks
Involved
Mr. B. S. Rahul started off the topic with the fact
that small and medium farm-holders account
for 81% of the total farmers. He briefed the
audience upon the present agriculture
scenario in India. He pointed out the efforts
made by the government to improve the
condition of the farmer. He further mentioned
previous schemes introduced to ensure the
income of farmer as well as crops till date.
However, he added that the majority of the
schemes introduced till date are area based
and has not been able to meet the expectations
due to various reasons.
Unlike normal insurance schemes, Mr. Rahul remarked, agricultural schemes are not annual
but rather on a seasonal basis. Explaining the crop insurance system in India, he added that
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the schemes acted as collateral in which lending agency has the first lien. It often happened
that farmer was not aware of the insurance payment credited directly in the bank account.
He mentioned that due to this, the direct effect of the insurance was diminished. He further
explained that sum insured was based on production cost and was availed up to the value of
yield only which worked as a safety net. He further elaborated that in this system, claims
process is automated.
He elaborated the implementation mechanism of insurance schemes in India, explaining that
all the insurance schemes have been run with government support only. The insurance
Companies are selected and allocated the districts for implementation of the scheme. State
Governments set up the administrative mechanism in their respective state. The farmers
avail crop loan from financial institutions and claims are settled by the insurance companies
to the insured accounts through financial institutions. He pointed out that availing insurance
on individual basis through individual assessment is not feasible at present due to shorter
time span of the insurance scheme.
He further moved to explain the National Agricultural Insurance Scheme [NAIS]. NAIS, he
added, is all risk insurance scheme and operates on area based approach covering all food
crops, oilseeds & annual commercial/ horticultural crops. He informed that the scheme is
available to all farmers - compulsory for borrowing & optional for non-borrowing. In this
scheme indemnity is calculated on actual yield data based on Single Series CCEs (Crop
Cutting Experiments) furnished by State Govt.
He explained the three components of the latest National Crop Insurance Programme (NCIP)
- Modified National Agricultural Insurance Scheme (MNAIS), Weather Based Crop Insurance
Scheme (WBCIS) and Coconut Palm Insurance Scheme (CPIS). He pointed out the pros and
cons of MNAIS. MNAIS covers prevented/failed sowing; post-harvest loses; and loses
accorded due to natural calamities on individual basis. He furthermore explained that the
WBCIS scheme is parametric product scheme based on ‘Crop-Weather’ relationship. The
scheme operates on area approach linked to a reference weather station and the sum insured
is based on ‘cost of cultivation’.
He further listed the major challenges in the agricultural schemes as large number of CCE,
limited use of technology, issues in credit delivery system, challenges in forecasting of
weather, selective and inconsistent participation, varying premium rates based on
geography and lack of awareness & insurance literacy etc.
Moving ahead, Mr. Rahul pointed out the risks involved in the agricultural sector of India,
namely yield risk and price risk as most significant ones. He further explained that yield risk
is generated from random uncontrolled inputs like weather including drought, flood,
cyclone, inundation, hailstorm, frost, cold waves etc. and also listed the factors that affect the
price risk namely, supply & demand, quality / perishability, price fluctuations and trade
barriers.
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Finally, he concluded his presentation by mentioning that the production risks are covered
under current schemes but price risk are yet to be covered and emphasized the importance
of evolving a crop insurance scheme providing both production and price risk coverage.
Presentation by Mr. Malay Kumar Poddar, Chief Financial Officer, Agriculture Insurance Company of India Limited
Topic - Lessons from pilot Farm Income Insurance Scheme (FIIS)
Mr. M. K. Poddar briefed the audience about the FIIS that was introduced in 2003-04 for two
harvest seasons. He enumerated the lessons learnt from the scheme based on the report by
Joint Group 2004, Government of India.
Providing the background on FIIS, Mr. Poddar explained that farmers’ income is a function
of yield & market price. The risks are high and even normal production may fetch low price.
He further expanded on NAIS that it covered only yield fluctuations and does not guarantee
the revenue for the farmer. And hence the scheme doesn’t
provide income security.
Elaborating the objectives of the FIIS, Mr. Poddar said
that the scheme provided comprehensive income
protection in the event of loss due to yield and/or price
fluctuations. The scheme aimed to help maintain flow of
agricultural credit. Moreover, this scheme encouraged
progressive farming practices both in terms of
technology & market economics.
Explaining further, Mr. Poddar mentioned that FIIS aimed to reduce Government
expenditure on procurement at MSP (Minimum Support Price) and paves way for gradual
exit from MSP regime. He also added that the scheme was envisioned to streamline yield
assessment procedures and pricing mechanisms to help build up comprehensive database.
Furthermore, he mentioned that the main benefit derivable from the scheme was that it
provided income risk protection to entire produce as against income protection of only
marketable surplus under MSP regime.
Mr. Poddar then explained the salient features of FIIS and mentioned that the Agriculture
Insurance Company of India Ltd. was the implementing agency for FIIS which was
compulsory for loanee farmers and voluntary for non-loanee farmers. He further informed
the participants that all risks leading to loss in farm income were covered under the scheme,
which included adverse fluctuations in yield due to any non-preventable natural perils as
well as adverse fluctuation of market prices.
Mr. Poddar elaborated on the method by which the sum insured was calculated. He explained
that yield was taken at unit area while market price and premium rates were determined at
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district level. He added that the product of average yield of past 7 years, indemnity level and
MSP were used to calculate the sum insured under the scheme.
Explaining the indemnity procedure, Mr. Poddar said that the procedure was automated and
farmers need not lodge any claims. He added that actual income was determined by the
production of current season’s actual yield and market price. And the difference between
guaranteed income and actual income would be paid to farmers. He further explained that
for this purpose, Daily Modal Price (DMP) for 8 weeks starting from the first arrival of grain
is recorded by each APMC. Moreover, for ensuring the sum, the cap of 20% was provided in
MSP for price fluctuation in the market price.
Mr. Poddar also mentioned that NAIS was withdrawn for the crops covered by FIIS in the
districts chosen for the Pilot and the MSP-Procurement system was withdrawn in the
districts in which Pilot Project on FIIS was implemented. He informed that under FIIS in Rabi
2003-04, 15 district of 8 states were covered and in Kharif 2004, 19 districts of 4 states were
covered.
He then went on to explain the observations of Joint Group 2004, Government of India. It was
observed that target of 100 districts remained unfulfilled as many states disagreed with the
proposal of suspension of MSP based procurement in areas of FIIS. It was further mentioned
that the consensus from the state was that the scheme would not benefit farmers as yield &
price offset each other and the states also believed that the premium rates were higher than
NAIS even after subsidy. Further, the exclusion of risky crops like soybean, groundnut, cotton
etc. was also one of the reasons that FIIS was not widely acclaimed. The Joint Group 2004
also observed that market price for superior varieties hardly goes below MSP, making
guaranteed income less attractive. It was observed that probability of claims is less as both
yield and price go down together rarely due to the negative correlation between them.
Further improper functioning of APMC/ Mandi Boards and unavailability of past & even
current data were pointed out as another challenges in the successful implementation of FIIS.
It was also found out that since yield fluctuation and the price risk were already being taken
care of by NAIS, FIIS did not hold much relevance then. Following this observations, FIIS was
discontinued from Rabi season 2004-05.
Pointing out the key learnings from pilot FIIS 2003-04, Mr. Poddar mentioned that the
scheme was conceptually ideal, but it was premature to substitute the deep-rooted MSP
regime. This was because MSP was available to all farmers at no additional cost whereas FIIS
was only available to insured farmers. There was also an anomaly between prices as
guaranteed income was assessed on technical basis but claims are reimbursed based on
market price.
Mr. Poddar also pointed towards the suggestions of Working Group (WG) on Risk
Management in Agriculture for XI Five Year Plan 2007-2012. Working Group considered
Income Insurance as a comprehensive risk mitigation tool in agriculture and recommended
revival of FIIS with some suggestions. It was suggested that guaranteed income should be
based on ‘futures’ price from Commodity Markets and that that the scheme could be tried
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initially for price sensitive crops like pulses and oilseeds in 40-50 selected districts.
Highlighting an important suggestion by WG, Mr. Poddar said that the premium rates
charged to the farmer would be at par with those charged under ‘area yield’ insurance
schemes. Some of the other important suggestions pointed out by Mr. Poddar included small
unit area for assessment, creating awareness in farmers and removing farmers’
apprehensions and inhibitions. It was also suggested to decide on the status of MSP as MSP
and FIIS cannot run in parallel to avoid ‘double benefit’ by farmers. Being specific on the
technicalities, Mr. Poddar further added that financial liabilities and roles & responsibilities
of all stakeholders should be clearly defined and suggested that a comparative study of
developed markets vis-a-vis ours should be carried out. Concluding the insights from
Working Group, Mr. Poddar affirmed that procurement at MSP should be continued till 50%
coverage is achieved.
Moving on, Mr. Poddar stressed upon the transparency and clear definition of roles and responsibilities of all the stakeholders involved including state government, implementing agency and banks. He emphasized the need of functional market mechanism /matured commodity markets to independently determine the price fluctuation between sowing and harvesting. Mr. Poddar also suggested that a realistic deductible should be operationalized i.e. only a significant shortfall in revenue should trigger claims. He in turn also added that the scheme should be more attractive than existing insurance schemes and MSP regime in order to be accepted widely and stressed upon the need of a stable long term policy and formulation of Agricultural Risk Protection Act. He concluded his presentation by suggesting that reinsurance capacity building within the Country is the need of the hour.
Presentation by Shri. Raj Kumar, IAS, Principal Secretary, Agriculture and Cooperation Department, Government of Gujarat
Topic - Crop Insurance Scheme – Gujarat State experience and Reforms required in
existing scheme
Shri. Raj Kumar started off his
presentation by informing that NAIS
has been in operation in Gujarat for
last 15 years. He mentioned that
recently the GoI has made the option
available to the States to choose from
either existing scheme or the new
scheme. He then briefed the audience
on the initiatives taken by Gujarat
government to overcome the
shortcomings of the NAIS.
He cited an example of year 2012,
when the sowing area itself was less than the insured area due to the delayed rain. Hence, a
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huge problem arose in settling the insurance claims. It was then decided by GOI that the
claims of the farmers would be settled by applying area reduction factor.
Genesis of the claim settlement issues were due to manual system of data collection, collation
and aggregation which had made the proper assessment to be difficult. Hence, the need of
reforms in the implementation procedure of NAIS. He further explained that the existing
schemes provide insurance for the loss of yield as compared to the threshold yield. He also
added the nature of other kind of insurance which are weather based, in which the
assessment is carried out based on the weather parameters including rainfall, gap in rainfall,
moisture etc.
Mr. Kumar elaborated the key challenges in successfully implementing the insurance
scheme. He pointed out high premium rates beyond the value of threshold yield is one of the
major concerns of the farmers when it comes to the NAIS. The other issue is that the farmers
who do not avail any loans are often deprived of the insurance schemes due to lack of
awareness. He further underlined the moral hazards as a key challenge since farmers prefer
buying insurance in difficult year only and there is almost non-existent field verification of
crops by banks/ insurance companies. This is contradictory to the general rule that any
insurance scheme will be successful if maximum people participate. The other key challenge
mentioned by him was uneven distribution of risk among stakeholders. Under NAIS, risks
are largely borne by governments.
He mentioned that one of the major reasons of the above is that all the land records of the
state are computerized and is available online. Through this system, the farmer is able to
apply for the insurance scheme online. He further informed that the state government has
developed a collaborative portal with banks and farmers as key stakeholders
(kcc.gujarat.gov.in). It also provides an excellent platform to farmers to know everything
about the NAIS before applying for the insurance online. He also mentioned that through this
online application system, total transparency has been ensured and therefore chance of
moral hazards has been reduced & speed and accuracy in implementation of NAIS could be
achieved which will ultimately lead to the faster settlement of crop insurance claims.
Moving forward, he pointed out the likely outcomes of these reforms and said that there is a
less likelihood of area discrepancy and application of area reduction factor. He mentioned
that instead of uniform level of TY (Threshold Yield)/AY (Average Yield) at State level, this
reform would facilitate crop-wise TY/AY in every Block. Further, he also informed that this
enables the use of mobile communication for crop specific extension services. Pointing out
the transparency and trust among the stakeholders as the most important outcomes of the
reform, which would bring down commercial rates of premiums as envisaged under
NCIP/NAIS. He further stressed that increased level of transparency and trust would
eventually bring down the risks borne by the stakeholders and with the help of lower risks,
the premium rates will be brought down by the insurance companies. He also urged the
banks to reach out to unbanked farmers and issue KCC.
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Elaborating on the reforms in the agriculture sector in Gujarat, Mr. Kumar then delineated
the various reasons due to which the state has been able to achieve the average growth rate
of 10% in the past decade, major steps being promoting micro irrigation, soil health cards,
water conservation, etc.
Mr. Kumar concluded his presentation by requesting all the stakeholders to think in the
direction and come up with an insurance scheme with low premium rates.
Presentation by Ms. Harini Kannan, Head Agriculture - South West Asia, Swiss Re Services India Private Ltd
Topic - Crop Revenue Insurance - Case studies from mature markets
Ms. Harini Kannan briefly compared the
indemnity, index and revenue insurance. She
explained that Indemnity Insurance is a classical
insurance with on-spot loss assessment. She
mentioned that this is more suitable in the
regions where average land holding per farmer is
high. She further explained that in the indemnity
insurance, losses are covered by actual
assessment of individual losses. She further
stressed that structuring indemnity products is
not cost effective in such regions.
Explaining the Index Insurance, she mentioned that it is best suitable for regions like Asia
where average land holding area is lower and the agriculture insurance schemes introduced
India are index based mostly.
Talking about the Revenue Insurance, she mentioned that farm income insurances are
revenue insurances. She explained that revenue insurance is a combination of yield data and
price data. She informed that in American markets, it is believed that this insurance should
be made available for the crops that are traded in future exchanges.
Analyzing the worldwide crop insurance markets, she pointed out that USA and Canada are
the largest market in this sector by volume of premiums. She mentioned that India is a fast
emerging market in this sector, currently ranking fourth worldwide. She informed that this
included all types of insurance covering agriculture and allied sectors. She provided
examples of scattered attempts made worldwide in the direction of revenue insurance and
added that in Asia, area yield index is the most popular among others while index insurance
is the most popular in India.
Ms. Kannan elaborated on several conditions that need to be fulfilled for a revenue product
to be quantifiable and attractive to the farmers. Further explaining the subject she stressed
upon the need of a liquid future exchange market for standardized soft commodities. She
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added that regional/local future markets can be considered only after prior assessment
about liquidity and trading volumes. She further stressed upon the need of a sound price
finding mechanism to determine the final settlement price at the time of the harvest to assure
that the commodity future is still liquidly traded. She emphasized on availability of
sufficiently long yield data series at the appropriate spatial resolution and lastly mentioned
the need of good fundamental understanding of correlation between yield and price.
Explaining the challenges in predicting yield data, she showed her support to the use of
Terrestrial Observation Prediction System (TOPS) system developed by NASA and
implemented in the state of Maharashtra to predict the yield data. Talking about the price
data, she stressed upon using reliable data from a third party source and furthermore
suggested to set up price trigger mechanism in Insurance products based on percentage of
crop arrival in Mandis. She emphasized the need and importance of historical data to
structure products and a reliable data source for current claims settlements.
She further explained this with the help of case study of USA. She mentioned that in USA,
reliable historical yield data is available and is derived from future exchange only. She
explained the reason behind premium rates being higher than other insurance schemes and
said that revenue insurance offers higher coverage. Additionally, the available coverage
levels are 50% to 75% under the revenue insurance which covers unavoidable perils,
naturally occurring events and price fluctuations.
Going forward, she explained the crop revenue insurance with the help of two scenarios –
without harvest price option and with harvest price option. In the first scenario, the revenue
losses occurring due to difference in base price and harvest price are covered and in the
second scenario loss payment is done through multiplication of yield deficit and harvest
price. She pointed out the main difference between American and Indian market as the
dependence of American market on the future price of the commodity instead of MSP as is
done in India. She also mentioned that involvement of government in the insurance process
in very strong in USA.
She then elaborated on the case study of Brazil and said that indemnity insurance is most
famous and revenue insurance is only on pilot basis in Brazil. In addition, the insured area
has increased almost 70 fold between 2005 and 2011 due to the active involvement of the
government and subsidies provided in the premium rates of the insurance. She also
mentioned that farm income insurance was introduced on pilot basis by a private player
which was not much successful. Highlighting the reasons she said that subsidies were not
provided by the government and pointed towards the absence of good future market as a
cause of the poor acceptance of the scheme.
Ms. Kannan concluded her presentation by listing the bottlenecks in the successful
implementation of the revenue insurance as unavailability of good yield data, independent
price data and unavailability of futures market data.
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Panel Discussion:
The technical session was followed by the panel discussion on the topic Farm Income Insurance: Evolving Implementation Framework. The panel discussion was chaired by Dr. Dalip Singh, IAS, Additional Secretary of Agriculture, Department of Agriculture and Cooperation, Government of India Government of India. The members of panel were Shri. Raj Kumar, IAS, Principal Secretary, Agriculture and Co-operation Department, Govt. of Gujarat; Mr. P. J. Joseph, Chairman-cum-Managing Director, AICIL; Mr. P.C. James, Chair Professor, National Insurance Academy, Pune; Prof. Gopal Naik, Professor, Indian Institute of Management, Bangalore; Mr. Mohini Mohan Mishra, National Secretary, Bhartiya Kisan Sangh.
The panel members had detailed discussion on structure of the agriculture production &
agriculture market in India and risk management in case of both yield risk and price risk. The
panel members brainstormed upon the constraints in executing the existing agriculture
insurance scheme effectively. Further, the need of Farm Income Insurance Scheme was
emphasized and implementation framework of the scheme was discussed in detail.
List of Panel Members
Name Organization Designation
Dr. Dalip Singh, IAS Department of Agriculture and Cooperation, Government of India
Additional Secretary of Agriculture
Shri. Raj Kumar, IAS Agriculture & Co-operation Department, Government of Gujarat
Principal Secretary
Mr. P. J. Joseph Agriculture Insurance Company of India Limited
Chairman-cum-Managing Director
Mr. P.C. James National Insurance Academy, Pune
Chair Professor
Prof. Gopal Naik Indian Institute of Management, Bangalore
Professor
Mr. Mohini Mohan Mishra
Bhartiya Kisan Sangh National Secretary
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Presentation by Shri. Raj Kumar, IAS, Principal Secretary, Agriculture and Cooperation Department, Government of Gujarat
Shri. Raj Kumar kicked off the panel discussion with highlighting that every farmer should get a remunerative price for his produce. And insurance products should be seen in the light of facilitating such goal for farmers. Every farmer should be viewed as involved in a micro-business and if any business can’t earn sustainable profits, it can never continue beyond some time. For India, food security is not only a very significant element from the viewpoint of the country itself but also from the perspective of stability in global food prices. Hence, given the size of our population, the onus of ensuring food supplies lies with the farmers. Laying the groundwork here, he moved on to give insights into the structural format of agriculture as a sector and agriculture markets.
Mr. Kumar stated that almost 80% of Indian farmers are small and marginal ones having less than 2 hectares of arable land. The decision of choosing a crop by a farmer is taken by him only with a consideration of past prices and hence is subject to unpredictability. He further mentioned that the prices of most agricultural inputs such as seeds, tools, etc. are market driven. Almost all the time, farmers are at substantial odds with appropriate short term working capital coverage through formal channels, which inadvertently lead the farmers to go to a money lender who charges sometimes even more than 25% interest. This fact itself throws a spanner in the working of agriculture as a micro-business as opposed to that in the most developed nations. He emphasized the coverage of various government schemes such as Kisan Credit Card (less than 50%). He further added that the current insurance schemes such as National Agricultural Insurance Scheme, which mainly deals with yield risk doesn’t
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have much coverage. In Gujarat itself, only 25% farmers were covered under NAIS last year.
Mr. Kumar moved further to the topic of agriculture markets. Though he was appreciative of Minimum support price as installed in place by Govt. of India across 24 crops, he pointed out about its lack of uniformity in its coverage of crops and various regions of the country. The small and marginal farmers, he added to the topic of informal money lending business, face a lot of issues especially after obtaining a loan with exorbitant interest rates. Even the reform such as amendments of APMC Act has not able to ensure better price realization by the farmers. He enumerated initiatives such as contract farming, direct marketing, terminal marketing, etc. which have been formed to tackle such issues. Another such initiative is through Warehousing Development and Regulatory Authority, where farmers can store their produce in accredited warehouses and get loan up to 70% of the cost of their produce from the banks after showing necessary Negotiable Warehouse Receipts (NWR). Thereafter, when the market prices are up to the farmer’s expectation, the produce can be sold in the market. At this point, Mr. Kumar requested central government to study the outcome of APMC reform initiatives across the nation.
Another intervention, he delineated, is the Farmers Producer Organizations (FPOs) introduced by Small Farmers Agribusiness Consortium, the goal of which is to improve the network and thus the bargaining power of farmers in the agricultural market. However, he cautioned that the time which the uptick in FPOs might take, given the fact that about 50% of the total population of the country depends on the agriculture, can be much more than what India urgently can afford. He summarized his findings with his belief that if the farmer as a producer needs to be strengthen; it has to be done by consolidation and empowerment.
Along the direction of FPO, Mr. Kumar proposed the idea of Dynamic Farmers Groups. He added that through Crop Insurance Schemes, the information of the name, type and location of the crop sown by a particular farmer is recorded, a dynamic group of farmers can be formed in contiguous areas till the time the crop is sold in the market. Such group will be in-charge of deciding upon the final price of their produce which will be offered in the market. He further pointed out various mobile media social groups, such as “WhatsApp”, can be used to command such group dynamics, given such a high cellphone/ smartphone penetration in India. The decision of warehousing and other paraphernalia can also be better supported through such group synchronization. According to him, not only will such consolidation of farmers will allow better bargaining power but also improve trading opportunities on commodity exchanges such as MCX and NCDEX.
He mentioned that fertilizers are also over-used a lot of times, hence if a mechanism can be
evolved to connect Soil Health Card with the fertilizer usages and AADHAR-based cash
transfer of fertilizer subsidies, a database can be prepared with an estimation of areas and
associated agricultural production. Alongside, using this channel of information Dynamic
Group of farmers growing same crop could be formed in the given region/area. In addition
to the APMC, farmers groups sell their aggregated produce on electronic trading platforms
as well. He held his firm belief in the potential of FPOs and dynamic groups of farmers to
lead towards higher bargaining power of farmers and added that pilot of farm income
insurance scheme should be undertaken with FPO/Dynamic Group of Farmers. It will lead to
price transparency, which will go a long way in reducing the risks of insurance firms. He
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suggested therefore, for the panel members and other stakeholders, not to look at agriculture
insurance as a standalone product, but as a business and evolve suitable mechanism to deal
with the challenges.
Presentation by Mr. P. J. Joseph, Chairman-cum-Managing Director, AICIL
Mr. Joseph started off with his view by delineating
the agenda of his speech as to present the
perspective of insurer when it comes to crop
insurance schemes in India. He said that Crop
insurance is a commercial activity and hence
should be profitable in the long term whether it is
revenue insurance or yield insurance. Unlike
other insurance, in case of crop insurance there is
an important role played by the government. He
warned that the basic problem which we have
with yield insurance will continue to play in
revenue insurance unless the problems are set
straight, such as yield assessment which is not
done very rigorously till now. He further indicated
that revenue insurance had its own problems as
explained by the speakers before, such as the lack of robust commodity market, delay in
getting yield data from government, delay in calculating the losses by the insurance firms
etc. Today there is a lot of dissatisfaction among farmers with respect to insurance schemes
and to ensure that these do not continue for the new insurance scheme as well, he
emphasized to set the issues straight.
Presentation by Mr. P. C. James, Chair Professor, National Insurance Academy, Pune
Mr. James highlighted the role of agricultural insurance as significant in the Indian context
since about 50% of the population depends on agricultural income directly or indirectly.
However, he remarked, agriculture insurance is relatively new concept and it is a noteworthy
fact that in the last few years, agriculture insurance companies have dramatically reduced
risks, such as risks related to insuring groundnut production have come down from a cost of
around 25% to 9%, cotton from 17% to 8%, etc. He added that the expenses of agricultural
insurance companies have also reduced to 2% when compared with other insurance sectors.
All of these are helping farming community to ensure a much more affordable price than
before. He further indicated that since farmers are not able to spend time in paperwork, the
insurance plans have now been prepared to take such issues into consideration.
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However, he cautioned that agricultural insurance is a difficult subject to deal with because
of systemic risk associated with the sector. There is a need to measure many things along
with the presence of too many stakeholders and in addition there is not much discipline in
the measurement of correct information and data. He again warned about including systemic
price risk when evolving the new insurance scheme on the top of yield risk which itself has
associated systemic inclination.
He summarized the crux of insurance conundrum with the question “Who will bear the cost
of risk?” which ultimately, he said, leads to the policy holder but in process the problem is
also shifted to the insurance companies, the government or some other agency. Ultimately,
the end is not sustainable unless the cost of risk is properly understood and reduced before
new insurance schemes are adopted. He further added that the government might have to
come forward with a definitive plan to give accurate results with an authority to determine
the forward price so that speculators do not take advantage by defrauding the farmers and
insurance companies.
Mr. James then moved on to talk about the prices that have certain but unpredictable boom
and cycles year after year, which leads us to the question of bearing the cost of such a long
duration systemic price risk. He summarized his speech by exhorting all participants that the
time is ripe now to look at price risk but it will require huge amount of resources in research,
studies, and government intervention on which the only hope is to go ahead but with caution.
Presentation by Prof. Gopal Naik, Professor, Indian Institute of Management, Bangalore
Prof. Naik started off his discussion with the remark that current farm income insurance
should be used as an alternative to the existing risk management mechanism. As he further
explained, when farm income insurance was first introduced, he himself was very closely
involved in it and in fact he made the first presentation in the Prime Minister’s Office. The
requirement of that time was
There was 60 million tonnes of foodgrains to tackle
The cost of carrying these was INR 20,000 crores, because of which it was highly
desirable to reduce the burden on the government in order to make sure that there is
a less procurement for foodgrains and therefore alternative policy regimes could be
thought of.
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However, as he recalled, it did not have much
importance in the next two years of droughts
subsequent to the introduction of farm income
insurance, due to which the government stocks
were liquidated. Hence, Farm income insurance
was casted off and other alternatives were
looked for. He then posited that if the same
situation, without the droughts, had continued
in terms of stock building India probably would
have continued with farm income insurance
starting that time itself.
Prof. Naik briefly explained how such insurance
scheme can be implemented in the present
times. He initiated his views on the new
insurance scheme with the need for designing
the scheme in the context of technology revolution and the infrastructure and other support
sub-systems that we have today. He proposed, as a case, moving to a cost-plus income
assurance level and using the one that can come up with a level of income that can be assured
to the farmers. The “plus” could be anywhere form 0-15% depending on the situation and
current stock of a commodity. He further emphasized the importance of better data
collection while quoting Shri. Raj Kumar that for any of the insurance products to be
introduced, the data integrity is of utmost importance. He then pointed towards a case study
done by him in Karnataka where it was found that not only the survey number of the farmer
is important but also every plot within the survey number hold a lot of significance. His team
measured almost 75000 plots from one gram panchayat and showed in the study how
government recorded data are different than what actually prevails on ground.
Prof. Naik further emphasized that there is a need to treat the farm income insurance as one
product among several product such as weather based crop insurance, MNAIS, etc. These
serve different crop system and different areas, such as, in irrigated systems there is no need
for yield insurance because yield is more or less stable. Hence, he mentioned that weather
based insurance will be more useful where yields are highly related to a single weather
parameter. Therefore, not only alternative insurance products should be developed but also
other associated systems, e.g. data integrity, data collection systems, agricultural marketing
system, warehousing system need to have full accountability.
He showed an example of interrelationship between various activities in the farming in the
form of agricultural extensions. He then exclaimed that if the extension is weak, the
associated risk goes up, raising the level of insurance premium, due to which many farmers
might not opt for such insurance scheme. Hence, unless other sub-systems in the agriculture
sector have been taken care of, it will not be possible to make any insurance scheme a viable
product. Prof. Naik then moved on to show an example in the form of his project where data
from insurance sector and agriculture extensions i.e., information and input supply together
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can be consolidated so as to reduce the systemic risk and help farmers in opting for
appropriate insurance schemes as well as in improving the yield because of extension
effectiveness. If, he mentioned while concluding his address, we are able to create a system
where various interlocking contracts between insurance companies, input suppliers and
extension agencies can be leveraged, we might be able to help farmers in selecting
appropriate insurance scheme and reduce risk which will also help insurance companies in
providing viable insurance schemes effortlessly and efficiently.
Presentation by Mr. Mohini Mohan Mishra, National Secretary, Bhartiya Kisan Sangh
Mr. Mishra started off his discussion with a
caution that about 42% farmers are ready
to opt out of agriculture as of now. India
has a population of 125 crore which needs
to be fed and obviously import will also fall
short of covering this huge population. He
then rhetorically asked the way out of the
increase of input costs and the unregulated
markets. Hence, out of the several
questions that may be asked today, as he
declared in the direction of insurance
schemes in place, one is how to insure mixed cropping option where different crops have
different harvesting periods and acreages. Overall, he emphasized that there is a high
diversity in terms of weather, crop patterns and soil content across the nation. Though the
inputs from the farmers are homogenized from government’s side in a way to aim towards
assured income for farmers, he proposed to add the considerations of risk such as drought,
flood and other factors in the minimum support price (MSP) which will obviate the need of
insurance altogether, at least in major crops such as wheat, rice, etc. He further added that
we can also include the option of announcing of government procurement twice, once after
the harvesting season and secondly just before the next harvest, along with little monetary
incentive in place to the farmers to save crops in their own storages and go-downs for the
procurement before next harvest season, which will also help reduce the burden on the
government warehouses.
Mr. Mishra then highlighted a crop holiday in 2010-11 announced by the farmers on 1 lakh
hectares in Andhra Pradesh, on which he remarked that the problem was related to lack of
procurement and storage facilities from the farmer’s side. He underlined the emergent need
to think about the issue with the farmers’ side taken into consideration and the need to
rethink about this issue from the point of view of every stakeholder. Because, ultimately
what we want is the sustenance and satisfaction of the farmers from agricultural income. Mr.
Mishra further supported the implementation of Dynamic Farmers Group as pointed out by
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Shri. Raj Kumar to increase bargaining power of farmers but he claimed that the
implementation of this initiative will mostly be successful in Gujarat, Maharashtra and
contiguous areas and not in other parts of the country.
He further proposed to enact direct fund transfer from Natural Disaster Funds to the affected
farmers since most issues related to yield fluctuations are caused by natural disasters and
calamities. Hence, insurance schemes aside, aforementioned steps can be taken towards
reducing the challenges and issues in agriculture.
Concluding Remarks by Dr. Dalip Singh, IAS, Additional Secretary of Agriculture, Department of Agriculture and Cooperation, Government of India
Dr. Dalip Singh, Secretary to Govt. of
India, while concluding the panel
discussion extended his gratitude to the
organizers of the seminar and Shri. Raj
Kumar, Principal Secretary, Govt. of
Gujarat, for his enthusiastic support
towards the topic of the seminar. He
further thanked Mr. Kumar, especially
for the invitation extended to Govt. of
India and expressed his pleasure in
attending the seminar. Dr. Singh started
off with his views about the insurance
schemes by summarizing that the
participants of the seminar have talked about farmer insurance schemes where mostly the
production is insured and if, in case of any unforeseen reason, the prices of certain produce
rise up, current insurance mechanisms are not fully in place to tackle such issue. He further
stated that in 2003-04, the scheme Famers Income Insurance Scheme (FIIS) was
incorporated, but was discontinued after 2-3 harvest seasons. The reason, he declared, was
increasing difficulty in continuing with the scheme due to spike in insurance premiums and
unpredictability of the agriculture commodity prices which has relations mostly with the
demand and supply of the commodity and is almost independent of the farmers or the
government consensus. He further showcased the enactment of a new scheme, Modified
National Agricultural Insurance Scheme (MNAIS) which was put forth in 2013 after taking
into consideration past experiences and viewpoints of various states. MNAIS was put into
operation across the nation except in 5 states, including Gujarat. He mentioned that the
Central Government received suggestions from the other 5 states on which there was a
meeting with Agriculture Secretaries from these states on 14th of August, 2014, in which Shri.
Raj Kumar was also present. Dr. Singh further asked the audience and the participants to first
understand the novel and effective ideas put forward in the new scheme, MNAIS rather than
figure out a completely new one. The high-level discussion, as he indicated, led to the
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conclusion that the premium under MNAIS (5% - 10%) has been increased as compared to
earlier scheme (1.5% - 3%), which he termed as understandable but to discard the scheme
without considering its other merits will not be helpful in the long run. He emphasized the
significance of MNAIS as a huge scheme in itself especially juxtaposed with over 25% of the
Indian Government budget earmarked only for insurance schemes. In addition to the
insurance premium paid by central and state governments in earlier schemes, the
consideration or claims during any calamity also used to be paid by the central and state
governments. In this backdrop, Dr. Singh expressed his satisfaction about the MNAIS that the
regular insurance premium has to be paid by Govt. of India, the state governments and the
farmers while the compensation and claims will be paid by the insurance companies, which
now included 10-12 private companies as empaneled by the central government.
In conclusion, Dr. Singh underlined his belief that every stakeholder needs to work on the
challenges of the MNAIS and then bring the modified version or if needed a new insurance
product into the market.
Question and Answer Session
In the Q&A session, there were some suggestions from the farmers such as:
When FCI procures
certain product, INR 700-750
are paid upfront during
registration as the
procurement charges, which
means and increase in
ultimate cost by this amount.
Government should have a
staggered purchase, such as
incentivizing farmers for
procurement after the
harvest season such as in
June for wheat (as opposed to the harvest time, i.e., April and May). There are two
benefits of such staggered purchase – increase in farmers’ income and creation of
rural warehouse facility on a mass scale among groups of farmers.
Another suggestion was to add 10-15% over the top of MSP (Minimum Support Price)
since currently farmers have an incentive to involve themselves in managing and
fudging the data collected by the insurance companies, which leads to the lack of
reliability in such data. In addition, there is a need for policy actions to incorporate
farmers’ consensus into consideration while allowing them income commensurate
with their hard work.
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Conclusion of the Panel Discussion
The panel discussion was successful owing to emergence of a clear consensus among the participants. The importance of agriculture sector in India can be gauged by the fact that 50% of the population is dependent on this sector directly or indirectly for its livelihood. In addition, the food grains need of our country, given the population of 1.25 billion, can never be completely met by imports. Another contrasting fact among Indian farmers as opposed to other developed nations is that about 80% of the Indian farmers are small and marginal ones rendering the acreage highly fragmented. The numerous initiatives which have been formulated and subsequently operationalized to tackle the issue of assuring steady income for farmers include Kisan Credit Cards, Soil Health Cards, Farmers Producers Organization, facilities of accredited warehouses by Warehousing Development and Regulatory Authority, Minimum Support Price, etc. However, with a perspective that all these initiatives have been limited in their penetration, there is a clear need felt for across the board agricultural insurance. Modified National Agricultural Scheme, which has come up to tackle and fill up the gaps in terms of farmers income was ratified by all but 5 states, including Gujarat, the primary reason for which was the increased rate of premiums as opposed to that in the insurance schemes in place earlier.
The participants agreed to introducing measures so as to consolidate the farmers in some ways in order to increase their bargaining power in the market. Another direction where a clear consensus emerged was on the topic of data integrity. The data on which the government as well as the insurance companies base their rates, as Prof. Gopal Naik and Mr. Mohan Mishra affirmed were at odds with what actually prevailed on ground. Hence, the discussion had an undertone to evolve the solutions to the issues along the direction of yield insurance schemes in place, before venturing into the realm of price insurance. Another solution which emerged to tackle some of the problems related to existing insurance schemes was to incorporate staggered procurement by the government through Food Corporation of India, Ltd. with monetary incentive to the farmers for creating their own storage facilities. This not only will help reduce the burden on government warehouses, but also will strengthen the bargaining power of Dynamic Farmers Group, a term coined by Shri. Raj Kumar during the panel discussion.
From the perspective of insurance companies, there was a palpable demand expressed for government support in bearing the cost of insurance both in terms of the premiums and the claims associated. Mr. James underlined the importance of understanding that prices have certain but unpredictable boom and bust cycles. Another salient opinion expressed from the insurance camp was that the systemic risks associated with the current yield insurance schemes in place, might be compounded due to the addition of risk associated with price insurance.
Conclusively, all panel members were of the opinion to introduce some measures in the
current agriculture market to boost the bargaining power of farmers using commodity
market and social media. In addition, most reflected a need for not only understanding but
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also tackling the issues with the current yield-based insurance programs in place, before
moving on to evolve price-based insurance schemes. The discussion was made livelier with
the cases of Farmer’s holiday, Agricultural extensions, etc. introduced by the members and
ended in a positive note for paving the way ahead for new Agriculture Insurance scheme.
After the conclusion of Q&A session, memento was offered to the speakers:-
Dr. S. R. Chaudhary, Director of Agriculture, Govt. of Gujarat honored Mr. B. S. Rahul,
Deputy General Manager.
Dr. N. K. Singh, MD, GAIC honored Shri. Raj Kumar, IAS, Principal Secretary,
Agriculture and Cooperation Department, Govt. of Gujarat with a memento for his
contribution towards the successful completion of the seminar.
Dr. K. S. Detroja, Managing Director, Gujarat State Land Development Corporation Ltd.
was called upon the stage to do the honor of felicitating Mr. Malay Kumar Poddar,
Chief Financial Officer, Agriculture Insurance Company of India Ltd., New Delhi.
Mrs. K. B. Chaya, Joint Director of Agriculture was called upon the stage to do the
honors for Ms. Harini Kannan, Head – Agriculture amidst a round of applause.
Mr. B. M. Modi, MD, BSSC was requested to do the honors of felicitating Mr. P. J. Joseph,
Chairman and MD, Agriculture Insurance Company of India Ltd.
Mr. D. V. Barot, Addl. Director of Agriculture, Govt. of Gujarat was welcomed on stage
to extend honor with a memento to Mr. P. C. James, Professor.
Mr. S. J. Solanki, Joint Director of Agriculture, Junagadh Govt. of Gujarat was called
upon the stage to do the honors for Prof. Gopal Naik, IIM Bangalore.
Mr. K. S. Detroja, MD, GSLDC was called upon to felicitate Mr. Mohini Mohan Mishra,
Bhartiya Kisan Sangh, amidst a round of applause.
Mr. Prakash Rabari, Joint Director of Agriculture, Government of Gujarat, was
requested to felicitate Mr. Dalip Singh, Principal Secretary, Govt. of India, amidst a big
round of applause.
In order to conclude the seminar, Mr. N. K. Singh, MD, Gujarat Agro Industries Corporation
Ltd. was invited to the dais for the vote of thanks.
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Vote of Thanks by Dr. N. K. Singh, Managing Director, Gujarat Agro Industries Corporation Limited
Dr. Singh concluded the seminar
expressing his views on Farm Income
Insurance. He regarded it as a complicated
subject in which the major consideration
should be to assure the income of the
farmers after which the issue
automatically would reduce to a much
simpler problem. He highlighted Mr.
Mishra’s view on the issue in terms of
stabilizing the minimum support price
(MSP) or basically the farm income, rather
than relying completely on the insurance
industry for managing the challenges of
agricultural sector.
He specially thanked Shri. Radha Mohan Singh, Hon’ble Union Minister of Agriculture and
Smt. Anandiben Pater, Hon’ble Chief Minister of Gujarat for gracing the event. He further
expressed his gratitude towards Shri. Babubhai Bokhiria, Hon’ble Agriculture Minister of
Gujarat; Shri. Nanubhai Vanani, Hon’ble Sports Minister of Gujarat; Shri. Bhupendrasinh
Chudasma, Hon’ble Minister of Education and Food & Civil supplies, Gujarat; Shri.
Pradeepsinh Jadeja, Hon’ble Minister of Law, Gujarat and Shri. Kantibhai Gamit, Hon’ble
Minister of Tribal development, Gujarat. He further thanked the participants from
Department of Financial Services, Ministry of Finance and Reserve Bank of India for showing
their interest in the subject. He also thanked Representatives from Government of India,
Secretaries of states Agriculture department, Directors of Marketing Boards and government
& private insurance companies for their support. He also appreciated participation from
nationalized banks, co-operative banks, Gramin Banks, farmers’ organization, APMCs,
insurance policy experts, industry players and academicians. He also extended his gratitude
towards Bhartiya Kisan Sangh and progressive farmers for the active participation.
Appreciating the contribution of Dr. Dalip Singh, IAS, Additional Secretary of Agriculture,
Government of India, he said that his guidance will surely help move forward in the right
direction towards insuring farm income.
Moving forward, Dr. Singh thanked the organizing committee from Agriculture and
Cooperation Department for making this seminar such a huge success. Dr. Singh expressed
special gratitude towards Shri. Raj Kumar, IAS, Principal Secretary, Agriculture and
Cooperation Department, Government of Gujarat, for his constant support and guidance. He
also extended his special thanks to the Knowledge Partner (KPMG) and Event Partner
(Radeecal Communications) for their constant support.
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Summarily, Dr. Singh emphasized that the aim should be to insure the income of the farmer
and he extended the idea of farm income insurance as one of the tools for the assuring income
of the farmers.
Following the vote of thanks, the farmers were briefed about KCC (Kisan Credit Card) and
the process of applying online for insurance was explained in detail by the representative
from NIC (National Insurance Company).
Way Forward
The event concluded on a high note with an aim to work towards ensuring remunerative income of the farmers. The need of the framework for implementing the Farm Income Insurance Scheme was stressed upon. It was suggested that the bargaining power of the farmers can be increased through formation of Farmer Producers Organization (FPO) and Dynamic Farmers Groups. Learning from the experience of Pilot FIIS, it was emphasized that the new scheme should be implemented on group basis rather than on individual basis.
It was indicated that the attempt should be such that the risks are borne equally by all the
stakeholders. It was also suggested that the new Farm Income Insurance Scheme should be
attractive enough to be accepted widely. And above all, it was emphasized that the aim should
be more towards assuring famers’ income than insuring of farm income.