Background

Agriculture has long been considered the backbone of Indian economy. However, only 40% of the area under agriculture has access to irrigation facilities, while the rest of 60% are still subject to natural and climate disasters.

The government has been experimenting with various insurance schemes to deal with these risks and alleviate the distress caused to the farmers and farm workers, however only 23 % of the cropped area and farmers have an insurance cover – a situation that leaves a vast majority at the mercy of the weather and other related crop risks.

Pradhan Mantri Fasal Bima Yojana (PMFBY) is an important scheme of the Government of India that attempts overcome the prevailing shortcomings, and envisages covering 50 % of the area and farmers involved in cultivation. It raises hugely the subsidy amount to be provided by the government and extend the coverage provided to the farmers.

Though this scheme, with its low premium (for the farmer) and covering all crops can be extremely useful, large proportion of small holder farmers remain excluded. This is due to the fact that there is a lack of understanding among the farmers and farm workers of the usefulness of insurance products and how it is vital in protecting them against their risks and opening doors towards investments. There is also an absence of appropriate outreach mechanisms to connect with these small holder farmers.

Purpose

Through this partnership with the Ford Foundation the Facility will improve the understanding and implementation of insurance services and appropriate outreach mechanisms for farmers and farm workers to access government insurance programs.

It will do so through the extraction and dissemination of lessons learned through knowledge sharing sessions as well as through building the capacities for effective claims settlements through piloting use of technology for crop cutting experiments and claims adjustment /payment. These will help in building of demonstration cases lessons from which can be utilized for further action.

Activities

Improving the understanding and implementation of the financial services and outreach mechanisms through:

• Extraction and packaging of lessons learned through various partners (insurers, government extension agencies, network organizations, including farmers and farm workers) for meaningful action
• Dissemination of lessons learned through knowledge sharing sessions by way of symposia, conferences and other convening methodologies with government, insurance companies and distribution and implementation partners
• Building capacities for effective claims settlements through experiments and piloting use of technology for crop cutting experiments and claims adjustment /payment. These will help in building of demonstration cases lessons from which can be utilized for further action.