The importance of crop insurance for farmers.

 Home, health & automobiles – these are some of the most important assets for you and me! We can protect these assets from financial harm by opting for the right general insurance plans. However, for a farmer, crops are the most valuable assets. It is a farmer’s source of livelihood, without which, putting food on the table becomes next to impossible. This makes crop insurance extremely important for those in the agricultural segment. 

What is crop insurance?

Well, the name is quite self-explanatory. Just like car insurance protects you from the financial impact of unfortunate events that can harm your vehicle, crop insurance protects farmers from the financial losses arising due to yield losses. It compensates the farmer for crop damages and ensures such unfortunate events do not derail his/her finances.

This is extremely important considering that many farmers take loans to cover their operational costs. This means that in case their crop fails for whatever reasons, they are left in the lurch. They may not have the means to repay their loans, leave alone handle their daily expenses.

Pradhan Mantri Fasal Bhima Yojana (PMFBY).

Seeing this, the Government has introduced the Pradhan Mantri Fasal Bhima Yojana (PMFBY). This is a government-sponsored crop insurance scheme is designed to cushion the financial impact of crop failure and help stabilize the income of the farmers.

What does crop insurance cover?

From sowing to post-harvest storage, crops are exposed to several risks. Keeping this in mind, the PMFBY crop insurance scheme covers several unfortunate events that can lead to yield failure at various stages of the crop cycle.

Prevented sowing/germination failure:

The Pradhan Mantri Pashu Dhan Bhima Yojana crop insurance scheme covers sowing risks that result in 75% or more of the crop area going unsown. This could be due to lower than usual rainfall or other seasonal conditions. In such a scenario, the scheme will pay the farmer 25% of the sum insured of the plan.

Standing Crop:

After the sowing, risks could also occur to standing crops. Keeping this in mind, PMFBY also covers risks that occur between sowing and harvesting including non-preventable events such as drought or floods or inundation along with natural fire, and lightning, and numerous others.

Post-harvest:

Some crops need to be cried, cut, or processed after harvesting before they can be sold. Keeping this in mind, the Pradhan Mantri Awas Yojana crop insurance the scheme also offers protection for up to 14 days from harvesting against specific perils such as hailstorm, cyclones, and non-seasonal rains.

Localized Calamities:

Finally, PMFBY also offers coverage against loss or damage to crops due to localized risks such as hailstorm, cloud burst and natural fires, etc.

 

Exclusions of the PMFBY crop insurance scheme:

The aim of this crop insurance scheme is to provide farmers with complete protection against yield loss. However, there are certain events that are not covered by this scheme. These exclusions include:

-War and nuclear risks.

-Malicious damages.

-Other preventable risks.

As you can see, crop insurance is extremely important for farmers and PMFBY does a great job at providing the required cover. We hope this has been helpful, good luck and all the best!