By Madhusudhan Pillai
The government would have accomplished much better had it either supplied for or communicated option danger management measures to farmers to minimise the dangers emanating from new farm laws. The farm bills, namely the Agricultural Produce Trade and Commerce Bill, Farmers Price Assurance Bill collectively with adjustments in the Essential Commodities Act have offered farmers advertising and marketing freedom, supplied for contract farming, removed stocking limits and changed the operating framework of agriculture.
The existing unease amongst farmers and intermediaries is on account of improved danger perception. The farm sector engages more than 50% of the workforce and contributed 16.5% to GDP in FY20. Agri infrastructure: Insurers are mandated to invest not much less than 15% of their investment assets in infrastructure and housing. The infrastructure definition as amended by the IRDAI Registration of Insurance Companies (Second Amendment), 2008, offers for investment in building associated to projects involving agro-processing, provide of inputs for agriculture, preservation and storage of processed agro goods, perishable goods such as fruits, vegetables and flowers such as testing facilities for excellent.
Insurers can, hence, straight invest in financially viable projects such as integrated cold meals chains, creation/expansion of meals processing and preservation capacities across the worth chain the require for which has improved.
The Economic survey 2019-20 has projected investment in agriculture and meals processing infrastructure for FY20 to FY25 at `60,553 crore. There is a shortfall of integrated pack homes, reefer transport and ripening units at 99%, 85% and 91% respectively. The spin-off advantage, Central Institute of Post Harvest Engineering and Technology estimates, will be a reduction of wastage of 16% for fruits and vegetables, 6% for cereals, 8.4% for pulses and 10% for oilseeds. So, making proper infrastructure has the possible to enhance farm incomes.
Insurers, guided by their investment committees, can also participate in the Agri Infrastructure Fund. A coordinated work in between insurers can make funds obtainable for each debt and equity investments in entities engaged in this sector.
Insurance coverage: The warehouses and cold storages can be supplied extensive cover for all storage dangers and deterioration of stocks on account of failure of energy provide for perishables. The danger for the farmer will finish at farmgate/nearest marketplace on sale of the generate. When the purchaser requires more than the commodity, her danger commences. Linking inland transit insurance coverage of agriculture generate for inter-state trade and for refrigerated containers can help the sale of generate at much better price tag points inside India and also for exports.
Crop insurance coverage and rural employment: The PMFBY, which is now voluntary, has possible for employment generation of at least 1.5 million more than 3 years by way of the creation of a rural agency force which can concentrate on the improvement of crop insurance coverage and enhancing awareness. Technology options top to effective claims settlements can construct trust in insurance coverage as a danger management tool.
The scheme can also be aligned to the contract farming guidelines supplying for sum insured for insurance coverage cover primarily based on the price tag and worth as per contract, thereby lowering danger. FPO as a bigger unit for underwriting purposes for insurance coverage is a possible subsequent step. They will assist accomplish collective bargaining energy for remunerative rates.
Agri-tech get started-ups supplying digital access to farmers, along with a physical presence and with a concentrate on farm-to-fork connect or linking farms to factories by way of technologies, can also companion with insurers in supporting farmers in the new operating atmosphere.
The insurance coverage sector can take up all these measures in an integrated manner and allay apprehensions, contribute to an alternate danger management system for agriculture and lead to a stabilisation of farmer’s incomes.
Senior insurance coverage expert