TAMIL NADU NATIONAL LAW SCHOOL

CROP INSURANCE

SUBMITTED IN THE PARTIAL FULFILLMENT OF B.A. L.L.B (Hons.), NINTH

SEMESTER

Submitted to: Prof. Deepika S. Shiv Submitted by: Akshay Kharte

Assistant Prof. of Law BA0140005

Faculty: Insurance Law V YEAR, IX SEMESTER

 CHAPTER-1

INTRODUCTION

India has Agro based economy and most of its populations are farmers. Farmers put all their
turmoil in order to grow best crop with unknown consequences but only the turmoil put by the
farmer is not enough for the best crop because it also requires favorable weather condition which
are not in the hands of the farmers. Indian Agriculture is heavily dependent on the rainfall which
occurs during monsoon season lasting for two and half months. The abnormal behavior of
rainfall causes severe impact upon the yield as heavy rain destroy the crop at an earlier stage
whereas the lower rain does not allow the crop to nurture properly. Thus bad weather results in
bad crop and ultimately it cause huge loss to the farmer as it is the only source of income for
them.

Mostly farmers’ takes loan in order to produce efficient crop as it is the only source of livelihood
for them for the entire year but due to natural factors and State machinery when their crop fails
they are left with no source of income and their debt also become over burden in due course of
time. On an average twelve million hectare crop area is annually affected by these natural
calamities.1 This is the precise reason that after every harvesting season, lots of farmers commit
suicide due to crop failure. The results can be widely seen in big states like Maharashtra,
Telangana, Andhra Pradesh, Madhya Pradesh and Karnataka. According to NCRB 2015 report
Maharashtra alone contributed to 38% of all farmers’ related suicides in the country.2

In order to provide security to the farmers so that they can grow crop without any fear of loss,
government came up with various Schemes like MSP, loan at cheaper rate, and Insurance policy
on crops etc.

MSP is the minimum price for a product established by the government and supported by
payments to producers in the event of the market price falling below the specified minimum. The

1
Gurdev Singh, Crop Insurance in India, (october 10, 2018, 8.00 AM),
http://www.spandanindia.org/cms/data/Article/A2015413113838_20.pdf .
2
The logical Indian Crew, At Least 26,339 Farmers Have Committed Suicide In Maharashtra From 2001 to
October 2017 Reveals Minister, ( Dec 17, 2017), https://thelogicalindian.com/news/26339-farmers-suicide-
maharashtra/.
Central Government obtains twenty five essential items from the farmers3 with the help of
agencies like National Agricultural Cooperative Marketing Federation of India Limited
(NAFED) and Food Corporation of India (FCI)4. The Problems with these Agencies are that they
are not easily in every areas due to which farmers could not avail the opportunities provided to
them resulting in selling their crop to middleman at lower rate.5

Crop of any area depends upon the topography and soil of that particular area and Indian
Agriculture is highly dependent upon the monsoon so in order to manage the loss suffered by the
farmers due to crop failure, an alternative is provided to them in the form of crop insurance. Crop
insurance is the mechanism where the loss of farmers are indemnified by the other person in
consideration of premium paid by them according to the risk involved in the area of cultivation.

Research Methodology

The researcher would be using doctrinal methodology which includes the analyses of the existing
concept. The data used for the research will include various scholarly articles, journals, case
laws, web pages, Insurance Act, etc. The researcher intends to use secondary sources for the
completion of the project.

Research Questions

1. What is the Crop Insurance?

2. How the Crop Insurance evolved in India and various Schemes, coverages and loopholes
related to that?
3. What are the risks involved in Crop Insurance?
4. How the Crop Insurance in USA and Japan is different from India?
5. What are the possible suggestions to improve the Crop Insurance in India?

Research Hypothesis

3
IAS Point, Minimum Support Price Scheme (october 10, 2018, 10.00 AM),
https://www.gktoday.in/academy/article/minimum-support-prices/
4
Nilanjan Banik, Farmer Suicides in India and the Weather God, (october 11, 2018, 11.00 AM), https://ac.els-
cdn.com/S1877050917325644/1-s2.0-S1877050917325644-main.pdf?_tid=84628d6a-7094-4c17-a992-
d5946deb7274&acdnat=1523648074_0b25b633f34f7c5d785a1f547bed0f55
5
Supra 3.
The Researcher hypothetically assumes that the crop insurance which is brought for the welfare
of the farmers is serving as the curse to them as they are not able to avail the benefits and also
because of linkage with loan amount putting an extraneous burden upon them.

CHAPTER-2

EVOLUTION OF CROP INSURANCE IN INDIA- VARIOUS SCHEMES, COVERAGES

AND THEIR LOOPHOLES

The idea of Crop Insurance can be seen in early twentieth century in India. In 1920, JK
Chakravarti brought a book named Agriculture Insurance: Practical Scheme suited to Indian
Conditions where he favored area based approach and also proposes to have rain insurance for
the Mysore state. The Crop Insurance is mainly required for three major purposes like-
Stabilization of income, Efficiency and Rural Credit.6

Crop Insurance in India has been properly taken into consideration soon after the Independence
in 1947. The work upon it with the proper study started in 1947-48 with the assurance of
Ministry of Food and Agriculture to introduce crop and cattle Insurance in the country. Going
through various studies and comparing insurances policies with other jurisdiction there arose a
question whether to follow Individual approach or homogeneous Area Approach.7

Individual approach indemnifies the farmer to the full extent of loss suffered by him and
premium is determined on the basis of past crop cultivation and losses suffered by him
previously. Unlike Individual approach, Area based approach considers one homogeneous area
like one village as one basic unit and accordingly the premium is fixed for all the individuals of
that village. Thus the premium and risk covered for all the individuals of that village remains
same irrespective of different yields and different losses suffered by them.8 The ministry favored
for the homogeneous area based approach but the above study did not result in any productive
output because the state did not accepted the proposal put forth by the ministry. After that till

6
Nilabja Ghosh and S.S. Yadav, Problems and Prospects of Crop Insurance: Reviewing Agricultural Risk and NAIS
in India, (October 14, 9.00 PM), http://www.iegindia.org/ardl/2008_Crop%20Insurance%20Report_Nilabja.pdf
7
Supra 6.
8
S.S. Raju and Ramesh Chand, Agriculture Insurance in India Problems and Prospects, NCAP Working Paper No.8,
http://krishi.icar.gov.in:8080/jspui/bitstream/123456789/812/1/oth_15.pdf.
19659, Crop discussion thus remained only in discussions because soon after the independence
there were many other serious emerging issues like State Reorganisation process, first general
elections, implementation of five years plan etc. where government is busy with.

In 1965, Government introduced a Crop Insurance bill which then sent to various states for their
views and suggestions. Later on the same bill is sent to the expert Committee under the
chairmanship of Dr. Dharam Narain to look upon the economic, administrative and financial
conditions associated with the bill. After going through all these conditions the committee
recommended not to introduce the above mentioned bill. Instead of the bill, the committee
recommended to use those funds in the agriculture productivity per se and ensure availability of
institutional credit to farmers and restore their credit eligibility in the event of a crop failure.10

The debate regarding crop insurance continued till 1972. After that the first crop insurance
program was started on H-4 cotton in Gujarat by Gujarat State fertilizer Company but it did not
give any productive results. This program covered 3110 farmers for a premium of Rs. 4, 54,000
and paid claims of Rs. 3.79 million leading to a huge loss.11 The above program although did not
gave successful results but paved way for other crop Insurances schemes. Later on in 1972
General National Insurance business was nationalized by the Act of Parliament and General
Insurance Corporation of India was set up. Taking an example from previous experiences GIC
asked Professor Dandekar to suggest for an alternative Scheme. Based on his suggestion Pilot
Scheme was introduced in 1979.12 The major feature of this Scheme was that it adopted Area
based Approach and concluded Individual based approach cannot be suitable to Country like
India because of the following reasons like large number of farm holding and no previous land
surveys or record were available13 Pilot Scheme was proved to be reasonably good by following
the Area based Approach leading to various other Schemes like- Comprehensive Crop Insurance
Scheme, Experimental Crop Insurance Scheme etc.

9
Supra 6.
10
Reshmy Nair, Risk mitigation and crop insurance in India: a performance analysis,
journal of Social and Economic Development ISSN: 0972, (2012)
11
Agriculture Insurance Company of India Limited (AIC), Crop Insurance in India, (October 15, 2018, 12 AM),
http://agroinsurance.com/files/AIC%20Insur%20India.pdf.
12
Supra 1.
13
Supra 11.
Comprehensive Crop Insurance was another positive step after Pilot Scheme. This Scheme
involved the participation of the States also and has the following objectives14

(i) To provide a measure of financial support to farmers in the event of crop failure as a

result of drought, flood etc.

(ii) To restore the credit eligibility of farmers, after a crop failure, for the next crop
season;
(iii) To support and stimulate production of cereals, pulses and oilseeds.

The above program was one of the largest program covering thirteen states and Union territories.
It kept a very low premium like 1% on rice, wheat and millets and 2% on cereals, pulses and
oilseeds and it was uniform in all over the states. This Scheme was optional on the part of the
States to participate but was linked to institutional credit. Thus the farmer who took loan from
institutional credit is part of it.15 Although there were certain loopholes in the schemes like CCIS
almost played a role of credit insurance rather than crop insurance but were proved to be
desirable at that time and gave way to National Agriculture Insurance Scheme.

National Agriculture Insurance Scheme is the expansion and improvement of CCIS. It covers
both borrowing and non borrowing farmers in almost twenty three states and two union
territories. It covered cereals, millets, pulses, oilseeds and annual Commercial/horticulture crops
with a very low premium rate in the range of 2-3.5 percent. It adopted homogeneous area based
approach for widespread calamity and individual based approach for local calamity. Also, three
levels of indemnity are provided i.e. 90%, 80% and 60% for low, high and medium risk
respectively. Moreover for small and marginal farmers premium are also subsidized by 50%
which is equally borne by both state and centre government. In spite of certain benefits provided
to the farmers, they are still not opting for this insurance because of certain lacunas existing per
se.16

Consequently, with so many benefits, it as certain loopholes like not able to properly apply
Individual based approach as insurance unit was large, coverage limited only to standing crop i.e.

14
Id.
15
Supra 6.
16
Supra 11.
from sowing to harvesting, Indemnity percentage of 60% which is for majority of crop is not
adequately implemented, poor infrastructure facility for non borrowing farmers and vegetable,
fruits and bodily harm are beyond the purview of this scheme. Taking certain flaws into
consideration Ministry of Agriculture under the direction of Prime minister constitute Joint group
to study these flaws and come up with certain suggestion in order to improve the policy.17

The recommendation made by the joint group are- reduction of insurance unit to gram
panchayat, to have only two level of indemnity i.e. 80% and 90%, pre sowing risk and pre
harvesting losses would also be covered, fruits and plantation crop would be covered on the basis
of pilot scheme, personal accident coverage would be provided to the farmer at the Zero cost and
for a pair of cattle at 50% subsidy, localized risk would be accessed on individual based
approach.18

There are also many other schemes like Farm Income Insurance Scheme (FIIS), Weather
Insurance scheme including Varsha Bima. Like other schemes these policies does not focus yield
production but focuses on factors leading to production of Crop. FIIS provides coverage in cases
of fluctuation market price which is also another problem of farmer for crop failure. It not only
helps the farmer but also helps the government to reduce their expenditure on the procurement of
Minimum Support Price. The scheme however does not give fruitful result because of higher
premium charged in spite of higher subsidy and improper functioning of Marketing
Developments.19

Weather Insurance focuses on indefinite weather condition leading to crop failure. This
Insurance seems to be need of the farmers as Indian farmers are highly dependent on weather
condition for their successful crop. It is also prevalent in UK, USA and Canada.20 ICICI
Lombard was the first Indian national company emphasizing on weather Insurance. This
insurance seems to provide fruitful result because of inexpensive in nature, speedy trial and
Independent rainfall report through India Meteorological department.21

17
Id.
18
Id.
19
Supra 11.
20
Supra 10.
21
Supra 1.
Thus there are two major Schemes available to farmers under crop insurance are- NAIS and
National crop Insurance Program (NCIP) with its three main components i.e. Modified National
Agriculture Insurance (MNAIS), Weather based Crop Insurance Scheme (WBCIS) and Coconut
Palm Insurance Scheme (CPIS). MNAIS is the improvement of NAIS with an additional features
in terms of coverage of ‘Prevented sowing’, post harvest losses, individual farm level assessment
in case of localized calamities, and On-Account settlement of claims in case of serious crop
losses/major disasters.22 CPIS operates largely like a non-life insurance policy. It is an annual
contract, administered only by Agriculture Insurance Company of India. Any palm grower
having at least five healthy nut bearing palms in a contiguous area is eligible to insure.23

WORKING OF CROP INSURANCE PROGRAM IN INDIA

Various ministries and Government organizations are responsible for the operation of Crop
Insurance in India. Product design is carried out at the national level by the Agriculture Insurance
Corporation of India in consultation with the Ministry of Agriculture, Government of India. The
Central and State ministries decides on the subsides to be given on premium, notification related
to crop insurance and contribution to the crop insurance fund. The State Revenue Department
issues certificates that provide information on land holding, crops sown, and crop yield. These
certificates become the basis for insurance coverage. The state Directorate of Economics and
Statistics (DES) carries out the crop cutting experiments to ensure production yields in the case
of NAIS.24

The agriculture Insurance Corporation of India (AICI) is the implementing agency of NAIS. All
the important factor related to crop insurance like premium, claims and subsides are maintained
by the AICI. The apex banks, state and district cooperative banks and primary agricultural
cooperative societies and banks are the main credit institutions. They also collect premiums and
settle claims. The writ of mandamus can be imposed against them if they are not performing
their duty properly. The Supreme Court held that the issue of writ of mandamus under Article
226 is not confined against statutory authorities and instrumentalities of the State. It can also be

22
Handbook on Crop Insurance (october 12, 2018, 9.00 PM), ,
http://www.policyholder.gov.in/uploads/CEDocuments/Crop%20Insurance.pdf.
23
Id.
24
V. Anjani Sneha, Crop Insurance – A Comparative Study Of India And U.S.A, (october 12, 2018, 1.00 PM),
http://krishikosh.egranth.ac.in/bitstream/1/76686/1/D9730.pdf .
issued to any other person or authority performing public duty even if the duty is not imposed by
the Statute.25 Thus all the nodal bank and intermediary agencies involved in implementation of
the policy would come within its purview.26

CHAPTER-3

RISK IN CROP INSURANCE

Risk refers to situation where alternative outcomes, not all of which are favorable to the decision
maker, can come out of any decision and these outcomes have certain probabilities that can be
found out empirically.27 Although risk and uncertainty are colloquially used but there exist a
very thin line between risk and uncertainty. Risks are associated with the probabilities that are
known and objective in nature whereas uncertainty refers more to the state of mind.28

Every Insurance Policy is associated with the risk. It is the risk that decides the coverage of
Insurance policy. The Insurer covers the specific risk and pays the damages accordingly. The
fundamental risks that are associated with agriculture are- hail, fire, thunder, flood, tsunami, frost
etc. Apart from the risk arising out from nature there are also other risk associated with the
agriculture like pest, disease, risk of accidents, thefts, machine break down, civil strife and wars
and in real life there are also other risks like blockade of roads, failure of power and often new
technology not working effectively.29 Thus majorly there are two risk price risk due to
agriculture trade liberalization and production risk because of adverse meteorology. 30

After discussing the risks associated with agriculture there arises a question as to who would
bear that risk so to answer that question three types of model are given. They are as follows:

25
Anandi Mukta Sadguru Shree Mukta v V.R. Rudani & Ors.,1989 AIR 1607.
26
Gunwantlal Sutar vThe State Of Madhya Pradesh, W.P. No.(PIL) No.512/2017.
27
Supra 6.
28
Id.
29
Supra 6.
30
Agriculture Insurance Schemes, (october 10, 2018, 8.00 PM),
https://ec.europa.eu/agriculture/sites/agriculture/files/external-studies/2006/insurance/full-report_en.pdf .
Systems fully controlled by the government – This is the system where government is
monopolistic entity having unified insurance scheme but this system causes huge fiscal expenses
for the government.31

Public-Private Partnership- This system provides cost effective insurance schemes to the
farmers because public sector looks after fairness and adequate price and private sector involved
in competition with other private players provide efficient and better service. Thus this system
provides better facilities to the farmers.32

Complete Market system- This system provides insurance with the fluctuating price in the
market as this is also a great concern and major reason for the crop failure.33

CHAPTER-4

COMPARISON OF USA AND JAPAN CROP INSURANCE SCHEME WITH INDIA

AND PROBLEMS ASSOCIATED WITH IT

The concept of Crop Insurance started way back in 18th and 19th century. Hail insurance
originated in Germany in the late eighteenth century and in USA in 1880. The great depression,
world wars and land reform policies are some of the major reasons for crop insurance policies.
Food and Agriculture organization of United Nation shown special interest in this regard by
forming a separate department called Marketing and Rural Finance Service to look after this
areas in various countries. The objective and idea of crop insurance is same in every country,
different is their approach in relation to constant factors like risk coverage, crops covered and
their nature, government participation and organization of implementer and mode of operation.
USA and Japan re the pioneers of Crop Insurance. Therefore it is necessary to look after their
approaches and development made in this area.34

31
Vladimir Čolović and Nataša Mrvić Petrović, Crop Insurance-Risks and model of Insurances, 3 EP (61) 561, 573
(2014)
32
Brandon Willis, Public-Private Partnership a Crucial Element in Crop Insurance Safety Net (Mar 11, 2016),
https://www.usda.gov/media/blog/2016/03/11/public-private-partnerships-crucial-element-crop-insurance-safety-
net.
33
Supra 31.
34
Supra 24.
CROP INSURANCE IN USA

Crop Insurance was started in USA in 1899 by a private company, Realty Guaranty Company of
Minneapolis providing multiple peril crop insurance, i.e. covering various risks at a time.
However the program was ended just after a year. Similar attempts were made till 1938, then,
finally in 1938 Federal Crop Insurance Act was passed wherein Federal Crop Insurance
Corporation was an agency within US Department of Agriculture responsible for the
implementation of crop insurance program in USA. The results were however not appreciable. It
was the 1980 amendment which made the significant change in the scope and objectives of crop
insurance. Under this amendment private companies market crop insurance with subsidized
premiums and participating private companies are provided administrative expenditure and
underwriting losses. Farmers are given an option either to choose crop yield insurance or revenue
insurance. This attempt was better than the previous but raised serious concerns over soundness
and limited participation by the farmer. Dissatisfaction with the above results and more crop
failure led to the passing of Insurance Reform Act, 1994.35

The 1994 Act made participation in the crop insurance program mandatory for farmers to be
eligible for deficiency payments under price support programs, certain loans, and other benefits.
In 1996 the mandatory clause was removed and in the same year Risk Management Agency
(RMA) was created to administer FCIC programs and other non-insurance-related risk
management and education programs that support U.S. agriculture. According to estimates by
the USDA National Agricultural Statistics Service, in 1998, about two thirds of the country's
total planted acreage of field crops (except for hay) was insured under the program.36

In the year 2000 the congress expanded the role of private sector allowing them to engage in
research and development of new Insurance schemes and products. With the expansion of private
sector role the RMA can enter into contract or create partnerships with the entities leading to the
development in the area of Insurance. Basically in USA crop Insurance is a contract wherein
each party has option to terminate the contract and if the contract is not terminated then it is
assumed to be automatically renewed. Under the contract the insured all the risks associated with
the crop on the case to case basis. Over the years the combined yield and price coverage has also

35
Id.
36
Id.
been introduced. It covers loss in value due to change in market price during insurance period
along with perils covered in the policy. Thus the crop insurance products eveloped by FCIS are
published in Code of Federal Regulation.37

In USA, crop insurance is clearly identified as risk management option. The Noninsured Crop
Disaster Assistance Program (NAP), managed by USDA’s Farm Service Agency, provides
financial assistance to producers of noninsurable crops when low yields, loss of inventory occurs
due to natural disasters. Multiple Peril Crop Insurance (MPCI) policies are available for most
insured crops. Other policies are being tested on a pilot scale. Some of the plans are38 :

1) Yield risk plan – indemnity is paid based on the difference between yield insured and actual
harvest.

2) Group risk plan – A county index is used as the basis for determining the loss. When the
county yield for the insured crop falls below the trigger level chosen by the farmer, an indemnity
is paid.

3) Dollar plan – Sum insured is based on cost of growing a crop in a specific area. A loss occurs
when the annual value of the crop is less than the amount of insurance.

CROP INSURANCE IN JAPAN

The Crop Insurance in Japan was started with the recommendation of German specialist called
Paul Mayet to Meiji Government and the bill for which was introduced in the year 1931. Initially
there was Zero participation from the side of farmers. When the Japan made entry in the world
war it became necessary for the farmer to get their crops insured with subsidized premiums but
the world war resulted in great failure in crop.39

After the world war the Insurance policy was again revised and made compulsory for four crop
i.e. crops paddy, upland rice, cocoons and maize and voluntary in others with a long list of
coverages. Administration at the Gun (county) level was placed in the hands of agricultural
insurance association (AIA) which offers to each and every village. The Insurance policy in

37
Supra 24.
38
Shri G. Venkatesh, Crop Insurance in India- A Study, (October 16,2018, 7.30 PM),
https://www.insuranceinstituteofindia.com/downloads/Forms/III/Journal-2008/Journal08_%20pg15-17_irda.pdf. .
39
Supra 24.
Japan is operated in three tier system at the national level. The risk covered in uniform in all the
counties with compulsory participation. Thus the government role in subsidization,
administration at various organizational levels and coordination helped in sustaining the policies
for so long period and providing greater assistance to the farmers.40

PROBLEMS WITH CROP INSURANCE IN INDIA

Thousands of farmers committing suicides after every year give a strong example that these
policies are not properly implemented. There are many problems related to crop Insurance but
the two major problems are- firstly the poor farmers are also has to pay premiums due to which
they could not avail the scheme most often and secondly once they are trapped in this cycle of
debt it is very difficult for them to come out of it because of which they could not avail the
benefits given to them. Thousands of farmer who has opened the insurance scheme through
Kisan credit card could not avail the benefits the scheme because of earlier unpaid dues. This is
the reason for the crop insurance to be a great failure as when the farmers are in the dire need of
it cannot avail its advantage.41

Although many schemes were launched from time to time in order to meet the loss of crop
failure but none of them proved to be grand success. The major reason behind this is lack of
proper plan and infrastructure leading to chaos at the time of paying of claims, Lack of Financial
stability, lack of awareness in the framers, lack of individual approach and of course lack of good
governance.42

Recently Union Government has launched Pradhan Mantri Fasal Bima Yojna (PMFBY) and
Restructured Weather based Crop Insurance Scheme (RWBCIS) in April 2016 to cover the
losses of farmer from crop failure but it was noticed a year after the Insurance Companies was
not able to support the claims in return of premiums paid by the farmers which gives a bad
instance about crop insurance.43 Already farmers are not coming up for crop insurance as they
assume that other financial help like borrowing money from money lenders are better option than

40
Id.
41
KP Narayana Kumar, Why crop insurance schemes fail poor farmers when they are needed the most, The
Economic Times, Apr 26, 2015.
42
S.S. Raju and Ramesh Chand, Agriculture Insurance in India Problems and Prospects, NCAP Working Paper
No.8, http://krishi.icar.gov.in:8080/jspui/bitstream/123456789/812/1/oth_15.pdf .
43
DTE Staff, Insurance Companies Collected Huge Premiums From Farmers but Failed to Pay Claims, (October
13, 2018, 7.30 PM), https://thewire.in/agriculture/insurance-companies-premium-farmers-claims.
insurance from companies and if such thing happen then that time is no far when crop insurance
would be remembered as great failure.

Another problem associated with the crop Insurance is that it causes delay on the part of bank to
collect premiums leading to delay in settlement of claims. Thus in spite of paying premium on
due date they are not able to avail the benefit when they are in dire need of it. Also there is huge
disparity between insurer and insured meaning insured are very huge in number whereas as of
now there are only ten private sectors engaged in providing insurance. They are as follows:-
Reliance, Tata-AIG, Royal Sundaram, IFFCO-Tokio, Bajaj-Allianze, ICICI-Lombard, HDFC,
ECGC and star health.44 Unlike USA due to lack of public private partnership government take
crop cutting experiments as the basis to determine the loss which sometimes does not enough for
compensating the loss of individual farmers leaving farmers in huge disappointment.45 There are
various cases filed against NAIS challenging its constitutional validity as it is unable to pay back
the compensation for the losses of the farmers in spite of compensation being paid by them on
time46 but none of them were proved to be fruitful

CHAPTER-5

CONCLUSION AND SUGGESTION

It is well known fact that Agriculture is the basic limb of the Indian economy which is severely
dependent on weather that can hardly be controlled. Therefore the farmers engaged in
Agriculture activity are provided with certain benefits in the form of crop Insurance with
subsidized premium so that they would not be puppets in the hands of money lender with their
arbitrary rates. Crop Insurance from the beginning undergone various changes in order to help
the farmers but could not become a cure to their disease to a larger extent because of loopholes
and lacuna in its implementation. Still there are many states like Punjab who are not part of this
Insurance policy. The reason could be lack of awareness or their lack of trust in the policy.

There are certain suggestion put forth in order to improve the policy so that it could serve its
purpose by serving maximum number of farmers. The suggestions are as follows:-

44
Supra 8.
45
Vividh Karyakari Seva Sahakari v Union of India & ors, Writ Petition No. 2353 OF 2003
46
Andhra Pradesh Rythu Sangham vs Union Of India (Uoi) And Ors, 2002 (2) ALD 486.
The awareness regarding the Insurance policy should be started from the very basic level like
from the panchayat from every village and the state which shows nil participation should be
called upon and explain the policy so that they could also become part of it and larger
participation could be achieved. Certain NGOs should take up the task of creating awareness
among farmers regarding crop insurance. In order to meet the claims of this larger participation,
like USA the public private partnership should be encouraged so that the burden would be shared
and claims could reach the farmers on time. Till now there are ten private players dealing with
this issue. Also, The coverage should be provided to all types of crop and the indemnity provided
by the company should be at least 80% of the loss then only the larger participation could be
expected. Most of the farmers do not opt for policy because their premiums go waste when the
coverage by the company is very less and does not reach on time and also when their previous
debts are due. In such cases subsidized premium should be charged from poor and marginal
farmers and should be provided by the benefits even though when their previous debts are due as
the purpose of the policy is to help the farmers when they are in need of it and once their crop
recovers debts can be collected from them.

In relation to implementation of the policy there should be delay on the part of the banks like
Japan so that it would become farmers policy instead of bankers policy. Also like Japan the
policy should be implemented at three tier in national level itself so that the work would be
shared. Now it is the crucial time when India should standardized and advance the policy by
introducing Farmers Income Insurance along with Yield Insurance and also certain benefits
should also be provided to the non loanee Farmers in order to realise them the benefits of
insurance policy and gain their trust in the policy. Nevertheless the government should also
introduce the Remote sensing technology like USA so that the weather condition could
previously be analyzed and accordingly measures could be beforehand. Taking into
consideration the present schemes and outcome and various precedents it can be said that the
scheme which is brought to cure the farmers is termed as curse to them as creation extraneous
burden upon them.
INFERENCE

The research question and hypothesis has been answered and positively proved.

Bibliography

A. Case Referred
 Anandi Mukta Sadguru Shree Mukta v V.R. Rudani & Ors.,1989 AIR 1607.
 Gunwantlal Sutar vThe State Of Madhya Pradesh, W.P. No.(PIL) No.512/2017
 Vividh Karyakari Seva Sahakari v Union of India & ors, Writ Petition No. 2353 OF 2003
 Andhra Pradesh Rythu Sangham vs Union Of India (Uoi) And Ors, 2002 (2) ALD 486
B. Book Referred
1. 1 J. V. N. Jaiswal, Law of Insurance, (2nd Edition, 2016), eastern book company,
Lucknow.
2. Avtar Singh, Law of Insurance, (3rd Edition, 2017), Eastern Book Company,
Lucknow.
3. Dr K V S Sarma, Modern Law of Insurance in India, (5th Edition, 2014), Lexis Nexis,
Haryana.
C. Articles Referred

 Gurdev Singh, Crop Insurance in India, (october 10, 2018, 8.00 AM),
http://www.spandanindia.org/cms/data/Article/A2015413113838_20.pdf .
 The logical Indian Crew, At Least 26,339 Farmers Have Committed Suicide In
Maharashtra From 2001 to October 2017 Reveals Minister, ( Dec 17, 2017),
https://thelogicalindian.com/news/26339-farmers-suicide-maharashtra/.
 IAS Point, Minimum Support Price Scheme (october 10, 2018, 10.00 AM),
https://www.gktoday.in/academy/article/minimum-support-prices/
 Nilanjan Banik, Farmer Suicides in India and the Weather God, (october, 2018, 11.00
AM),https://ac.els-cdn.com/S1877050917325644/1-s2.0-S1877050917325644-
main.pdf?_tid=84628d6a-7094-4c17-a992-
d5946deb7274&acdnat=1523648074_0b25b633f34f7c5d785a1f547bed0f55
 Nilabja Ghosh and S.S. Yadav, Problems and Prospects of Crop Insurance:
Reviewing Agricultural Risk and NAIS in India, (october 8, 9.00 PM),
http://www.iegindia.org/ardl/2008_Crop%20Insurance%20Report_Nilabja.pdf
 S.S. Raju and Ramesh Chand, Agriculture Insurance in India Problems and Prospects,
NCAP Working Paper No.8,
 http://krishi.icar.gov.in:8080/jspui/bitstream/123456789/812/1/oth_15.pdf.
 Reshmy Nair, Risk mitigation and crop insurance in India: a performance analysis,
journal of Social and Economic Development ISSN: 0972, (2012).
 Agriculture Insurance Company of India Limited (AIC), Crop Insurance in India,
(Apr 11, 2018, 12 AM), http://agroinsurance.com/files/AIC%20Insur%20India.pdf.
 V. Anjani Sneha, Crop Insurance – A Comparative Study Of India And U.S.A,
(October12, 2018, 1.00 PM),
http://krishikosh.egranth.ac.in/bitstream/1/76686/1/D9730.pdf
 Vladimir Čolović and Nataša Mrvić Petrović, Crop Insurance-Risks and model of
Insurances, 3 EP (61) 561, 573 (2014)
 Brandon Willis, Public-Private Partnership a Crucial Element in Crop Insurance
Safety Net (Mar 11, 2016), https://www.usda.gov/media/blog/2016/03/11/public-
private-partnerships-crucial-element-crop-insurance-safety-net.
 KP Narayana Kumar, Why crop insurance schemes fail poor farmers when they are
needed the most, The Economic Times, Apr 26, 2015.
 S.S. Raju and Ramesh Chand, Agriculture Insurance in India Problems and Prospects,
NCAP Working Paper No.8,
 http://krishi.icar.gov.in:8080/jspui/bitstream/123456789/812/1/oth_15.pdf.
 DTE Staff, Insurance Companies Collected Huge Premiums From Farmers but Failed
to Pay Claims, (oct 9, 2018, 7.30 PM), https://thewire.in/agriculture/insurance-
companies-premium-farmers-claims.