HYDERABAD: The crop insurance sector is expected to see 20-25 per cent growth in FY18, as the government’s thrust and increasing awareness levels are leading to the rise in acreage and sum being insured under crop insurance.
According to the observation of agriculture insurance companies, while the premium of Rs 5,700 were collected under crop insurance and 3.09 crore farmers were covered in FY16, the amount of premium collected rose four-fold to Rs 21,500 crore in FY17 and the number of farmers covered rose to 3.90 crore.
“Post Pradhan Mantri Fasal Bima Yojana (PMFBY), the number of farmers availing crop insurance has increased. However only 27 per cent farmers in the country opt for crop insurance. Majority of farmers are still out of crop insurance coverage, which gives us scope for further growth.
The government aims to cover 50 per cent of farmers under crop insurance in the next three years, which will lead to crop insurance companies’ growth,” said Dhyanesh Bhatt, vice-president — government solutions group at ICICI Lombard General Insurance Company.
Right now, about 18 players, including five public-sector firms, are offering crop insurance in the country and low penetration in the segment offers scope for all to grow. The changed rules post PMFBY and the mandatory deductions from all farmers who take crop loans towards payment of crop insurance premium, are leading to increasing coverage of crops under insurance.
“Governments are playing a proactive role in bringing farmers under the crop insurance net and increasing the coverage through specially designed schemes. But, awareness about importance of crop insurance is rising among farmers and there are farmers who are coming forward to pay for insurance in case of commercial crops and in specific crops where huge investment is involved.
As technology usage is increasing in agriculture and weather prediction is assuming importance, even crop insurance takers are increasing.
This year, rainfall predictions are negative, which we assume will lead to increase in crop insurance coverage by 20-25 per cent,” stated Anuj Kumbhat, director of Weather Risk Management Services, which observes the weather patterns and designs insurance products for insurance firms.
According to insurance sector experts, 386 lakh hectares have been covered and the value of crop insured stood at Rs1.41 lakh crore during Kharif 2016 season, while 193 lakh hectares and sum of crop insured stood at Rs 72,000 crore in the Rabi season 2016-17.