The Indian government is ready to spend around $100m for technology intervention in its flagship agriculture insurance programme, Pradhan Mantri Fasal Bima Yojana (PMFBY) in order to make it robust and attractive to farmers, said Dr Ashish Kumar Bhutani, CEO of the programme.
He said that PMFBY is the single most powerful and effective risk mitigation mechanism in the country but runs on primitive technology.
“Leveraging technology to address major lacunae in the scheme is a key priority of the government,” he said in his opening address at the 6th Asia Agriculture Insurance Conference in New Delhi yesterday.
He mentioned that after its re-election in May this year, the government carried out a review of the scheme. Despite the government spending $4.2bn on the scheme over the past three years, the PMFBY was generating negative publicity for the government as farmers were complaining of non-payment of claims. Moreover crop cutting experiments which form the basis of the calculation of yields, the computation of losses and claims is vulnerable to manipulations. “We have decided to migrate to technology-based assessment and not depend on crop cutting experiments,” he said.
Horticulture needs insurance cover
In his keynote address, Mr Rajeev Chaudhary, officiating chairman and managing director of the state-owned Agriculture Insurance Company spoke about how the horticulture segment is neglected by the insurance industry and this needs immediate attention as this segment is rapidly growing across the country, with many urban dwellers and youngsters pursuing farming in their homes and backyards. “We need to develop products in horticulture and food crops to meet the aspirations of the younger generation who are now diversifying into farming and growing vegetables,” he said.
Livestock insurance has huge potential
India has more than 500m cattle and more than 20.5m people in the country who depend on rearing livestock for their livelihood. In spite of this very little focus is given to livestock insurance and this needs to change, said Mr G Srinivasan, director, National Insurance Academy. “Insurers must come out with new age livestock insurance products to protect livelihoods of farmers,” he said.
Speaking on the changing risk scenarios happening around the world, Mr Rob Solloway, managing director and head of agriculture, Asia Pacific, at Guy Carpenter, said that change is constant and so the insurance industry to stay relevant must innovate and adapt.
Organised by Asia Insurance Review, the two-day conference with the theme “Feeding the world with smart agritech - A resilient agri insurance system” is being held in New Delhi and is attended by 120 delegates from 10 countries.