India's farm insurance proves costly for most vulnerable
What’s the context? As climate change ravages India's crops, world's largest government insurance scheme leaves vulnerable farmers exposed. India's crop insurance leaves vulnerable farmers exposed Farmers in high-risk areas pay more for less Effective crop insurance can boost farmers' resilience NEW DELHI - After years of low rainfall devastating soya bean crops on his central Indian farm, Dileep Patidar last year planted the pulse urad as it needs less water and he counted on the government's crop insurance scheme to cover him if it did not work out. But the gamble failed and he lost nearly half his crop. Then the insurance money never came. "I last received an insurance payout in 2019, and I've lost crops to low rainfall almost every year since then," said 49-year-old Patidar, who farms five hectares in the Mandsaur district of Madhya Pradesh. The Indian government runs the world's largest agriculture crop insurance scheme, subsidising insurance to reduce farmers' premiums. But an analysis by the Indian think tank, the Centre for Science and Environment (CSE), said farmers living in climate-vulnerable districts like Mandsaur faced higher premiums, had lower levels of insurance cover and received lower payouts compared to farmers in lower-risk districts. This undermines the purpose of a scheme that could be a crucial tool in building farmers' resilience, the analysis said. Climate change is increasingly impacting India's crops, with more than 4 million hectares affected by extreme weather events in 2024, nearly double the previous year, according to India's Atlas of Disasters, maintained by CSE. Just under half - 46% - of India's 1.4 billion people are employed in agriculture, a sector that supports 70% of rural households and generates 16% of the country's GDP, according to Indian government data. Patidar's monsoon crops were insured, but he is frustrated at still waiting for a payout while he said farmers in neighbouring villages had already been compensated. "I checked my bank passbook and saw that around 10,000 rupees ($115) was deducted for the insurance premium, but to what end?" he asked. Launched in 2016, the farm insurance scheme aims to protect farmers' incomes by aiming to insure 50% of all agricultural land by 2020, but by 2021 only 30% was insured, according to the latest official data. CSE Programme Director Amit Khurana said India's crop insurance scheme could be a vital safety net for climate-vulnerable farmers. But, he said, "farmers must perceive a benefit in adopting it which means those vulnerable have to pay less, if at all, for better support". However, this is not currently the case. CSE analysed 2023 monsoon crop insurance data for 21.5 million farmers in agricultural districts classified by the government as vulnerable to very high and high climate change risk. Farmers in very high-risk districts pay 70% more in premiums than those in lower-risk districts and 60% more than those in high-risk districts, the analysis showed. Despite paying more, farmers in the most vulnerable districts also received 20% less money in insurance payouts.
