Article Preview
TopIntroduction
Agriculture is the primary source of sustenance for more than 58% of the Indian population (IBEW, 2019). According to the 2020-2021 economic survey, the agriculture industry contributes almost 19.9 percent to India's gross domestic product in 2020-2021. It will increase from 17.8% in 2019 – 2020, and the only sector to have positive growth of 3.4% at a constant price in 2021 according to an economic survey 2020 – 2021. In 2017-2017 Only 26% of the area under cultivation was insured in India, compared to 69% in China and 89% in the US (Alexander, 2019). The first attempt at crop insurance was made in 1915 by Chakaravarthi, in the name of rainfall insurance, but it did not end successfully (Rao, 2019).
The new methodology referred to as a sectoral approach was not accepted at the state level due to financial constraints. In 1970, Dr. Dharm Narain's committee analyses the viability of crop insurance, however, Dandekar has recommended the new Area methodology (Rao, 2019).
The PMFBY system is used by all farmers. Farmers voluntarily insured crops and participated in the PMFBY program to protect their crops from natural disasters like floods, drought, etc. Under the PMFBY scheme, the crop cutting model was established on the basis of the Krishnagiri district. As all the main agricultural crops are cultivated in the Krishnagiri district. According to the recommendations of the District Level Oversight Committee, individual farmer compensation for crops can be paid to farmers, and harvest experiments can be based on yield. It will force farmers to minimize financial red ink caused by a variety of crop damage. It is going to improve farmers' livelihoods. It will create confidence among the farmer to adopt new innovative technology in crop production, stabilizing the income of the farmer to their continuous farming and will sustain the credit flow among the farming community.
The Scheme was implemented on the basis of ‘Area based approach’ i.e., Defined Areas for each notified crop for widespread calamities with the assumption that all the insured farmers, in a Unit of Insurance, to be defined as “Notified Area” for a crop, face similar risk exposures, incur to a large extent, identical cost of production per hectare, earn comparable farm income per hectare, and experience similar extent of crop loss due to the operation of an insured peril, in the notified area. Limited Area (i.e., unit area of insurance) is Village/Village Panchayat level by whatsoever name these fields may be called for major crops and for other crops it may be a unit of size above the level of Village/Village Panchayat. In a timely manner, the insurance unit can be a Geo-fenced/Geo-mapped area with a uniform risk profile for the reported crop.