There is need to free up agriculture insurance and move to an individual farmer-based schemes from the current homogenised area-based approach, said PJ Joseph, member, non-life, at Irdai.
The experience of individual farmers in schemes has not been satisfactory. A lot of uptake in agriculture insurance has come from farmers availing of credit as it was mandatory, but other farmers not are not buying insurance and are getting left out of the insurance net, Joseph said.
To make the scheme more efficient, Joseph suggested eventually moving to individual farmer-based schemes and a more credible system to asses loss. “We will have to move to individual farmer-based schemes from the homogenized area-based approach to insurance,” Joseph said.
Currently, individual crop loss assessment is not done, which ends up frustrating affected farmers as the sampling method does not adequately represent field-level situation.
With the Pradhan Mantri Fasal Bima Yojana, there was a move to actuarial-based premium regime, but claims management still remains with the state, Joseph pointed out.