Agricultural is labor intensive and continuous activity with famers working round the clock to feed the global population. With increasing commercialization of multiple activities associated with farming, it’s about time that agriculture is treated as business and is insured so that farmers can be compensated during crop losses due to natural vagaries, especially in developing countries like India. Governments in India have been making attempts to help farmers in times of distress through several initiatives. One such initiative is the Crop Insurance Scheme also known as, Pradhan Mantri Fasal Bima Yojana (PMFBY). It was launched in Kharif 2015 and aimed at helping farmers by

1. Providing financial support to farmers suffering crop loss/damage arising out of unforeseen events
2. Stabilizing the income of farmers to ensure their continuance in farming
3. Encouraging farmers to adopt innovative and modern agricultural practices
4. Ensuring flow of credit to the agriculture sector.

The premise of scheme is simple but the scheme has been difficult to implement in a vast country like India, where the agricultural practices, crops, markets etc. are highly variable and due to lack of access to modern tools and techniques for assessing crop status before and after damage, payment for damages are very difficult to measure accurately. Additionally, there have multiple associated challenges like payment to farmers (low payment, payments for wrong crops etc.), determining crop loss, and lack of payment on time and many more.

Since such schemes are a novelty for farmers in India, it has been slow to take off. Different government agencies need to make more concerted efforts to change the mindset of farmers by increasing their awareness through various promotion measures like audio-video media, extension and trainings at the village level.

Additionally, the challenges in crop insurance scheme also need to be sorted out to increase its effectiveness and wider acceptance by farmers in the country. For making the scheme more efficient some of the changes that can be made in the current frameworkare:

1. The number of stakeholders involved in the PMFBY scheme needs to come down significantly from the current number that include State Governments, financial institutions, insurance companies and farmers. It would be beneficial to all stakeholdersif ICT tools are used to integrate them for scheme administration and crop loss assessment.
2. With government being major contributor to overall premium, there is a need to create a state-run insurance agency specifically for execution of PMFBY with elements of accountability, continuous monitoring with incentives as well as penalties built-in to the agency by-laws to make it more efficient. Private insurers may still continue to administer the PMFBY but the degree of their accountability needs to be increased from current level.
3. The farmers must get their insurance claims before the commencement of the next crop; any later, and the benefit of insurance is lost.
4. The scheme should be more decentralized as the local variations are wide spread in the country.
5. Complete transparency regarding the flow of money, statusclaims, procedures, for farmers, insurance agents and government stakeholders need to be introduced and maintained.

The scheme has the potential to help farmers in the long run. However for scheme to be sustainable, it should be made more practical for on-ground implementation and ease of operations for all stakeholders so that farmers feel getting help and not more distress.

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