The weakest link in crop insurance -Harish Damodaran

-The Indian Express

The crop in a well-marked plot of this field is, then, harvested, threshed, winnowed and weighed. If the produce contains moisture, it has to be dried first before weighing.

Crop cutting experiments (CCE) have traditionally been conducted to obtain reliable average yield rates for estimation of agricultural production. These are mostly done by district/subdivision-level officials from the revenue, economics and statistics or agriculture departments of the concerned state governments. The field where a CCE takes place is supposed to be selected based on scientific sampling. The crop in a well-marked plot of this field is, then, harvested, threshed, winnowed and weighed. If the produce contains moisture, it has to be dried first before weighing.

The above system has been a tried-and-tested one and seen as having worked reasonably for arriving at agricultural production estimates. But when used for payment of crop insurance claims, it is hardly the best for two reasons. The first is for the simple fact that states would “want” yields to be higher in the former case (to paint a rosy picture of production), while lower in the latter (to enable farmers get the maximum insurance payout).

The second reason for non-suitability is the sheer number of CCEs required in a crop insurance scheme, whose aim is not to arrive at an average yield figure, but to provide risk cover and make individual loss assessment in respect of crores of farmers. Under the Pradhan Mantri Fasal Bima Yojana (PMFBY), states are supposed to carry out at least four CCEs in every village panchayat for each crop and submit the yield data to insurance companies within one month of harvest. Given that there are about 2.5 lakh gram panchayats in India, it would mean 10 lakh CCEs in a single season — and many more if more than one crop is grown in the same village or even by the same farmer.

Not for nothing, getting so many CCEs done within a short time span has proved to be the biggest challenge in implementation of the Narendra Modi government’s flagship crop insurance scheme. “We need to reduce the number of CCEs and, at the same time, ensure sufficient data integrity to satisfy the insurance company,” an Agriculture Ministry official noted.

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The Indian Express, 26 April, 2018, http://indianexpress.com/article/india/the-weakest-link-in-crop-insurance-pradhan-mantri-fasal-bima-yojana-the-weakest-link-in-crop-insurance-5151812/

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