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Agricultural Insurance, Risk-Preventive Measures and
Remote Sensing for Crop Surveillance as Effective
Alternatives to Loan Waivers and Other Short-Term
Palliatives for Farmers’ Distresses
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The story that has unfolded in earlier sections of the study has
provided a number of lessons on the more effective involvement of formal
banking institutions in meeting credit support for farmers. It is the considered
theme of this study that the three key short-term palliatives introduced by
the government, namely, loan waivers, doubling of bank credit for agriculture,
and interest subvention schemes, have been harmful for both the banking
institutions as well as the farm community. We have set out in an earlier section
how resurrection and reinvigoration of the rural financial architecture along
with definitive social goals will help achieve an enduring role by the banking
institutions, particularly in fulfilling the objectives of financial inclusion.
Notwithstanding the initiation of multiple developmental programmes
for agriculture or the efforts at improving the working of the rural financial
architecture, Indian farmer would continue to face multiple risks arsing from
uncertain weather conditions, rainfall variability natural, natural disasters
and fluctuating output prices, which at times affect incomes and livelihoods
of large sections of the farm community, particularly the majority of small
and marginal farmers who have limited ability to withstand adverse weather
conditions, particularly dips in rainfall. Therefore, there is the imperative of
operating insurance schemes for agriculture that can mitigate the adverse
consequences of weather failures.
Insurance Schemes in Operation
The subject of crop insurance has received focussed attention in the
country. There are four key control insurance schemes operation:
(i)
National Agricultural Insurance Scheme (NAIS)
(ii)
Modified NAIS on a Pilot Bais
(iii) Pilot Weather-Based Crop Insurance Scheme (WBCIS)
(iv) Pilot Coconut Palm Insurance Scheme (CPIS)
27
This is a tentative part of the study requiring some further firming up the broad conclusions
of the study will remain valid.
