Tuesday, June 16, 2015

Crop insurance-Why India is not promoting this life saving route for farmers?

Farmer suicide has become so common and frequent in India that cases reported in the media are invariably ignored except for some noises made here and there by some vote conscious politicians and social workers. Of course India is considered the global capital of suicides and if statistics are to be believed the farmer suicides are not above the average figure for the country. It is rather sad that the country, meaning the governments and the politicians who exercise power, have not done much in addressing this grave problem though every body knows agriculture is the backbone of the country's economy besides being the "bread producer" for the 130 crore population! Imagine what catastrophe can happen if these most neglected segment of our population decides to "strike" work as most organized labor unions are doing to day literally blackmailing the country frequently for seeking more and more to their kitty! In a country like the US farming is no more an adventure or risk because of the beautiful farmer insurance system that provides a safety net to the farmers during crop failure. Here is a commentary on this insurance coverage as it operates in that country.  

In fact, that is what inspired me to farm. I had a passion for growing food and, in the case of my home state of Washington where wheat is a highly exported commodity, I had the satisfaction of knowing that my work as a farmer contributed to feeding people not only at home, but all across the globe. The food security we enjoy in this country is made possible in no small part through United States farm policy. With the 2014 Farm Bill, Congress shifted the focus of farm policy to risk management. It made crop insurance the centerpiece, and quite rightly. It helps farmers recover from natural disasters and volatile market fluctuations. It enables them to plan and budget for the long term in the most effective and efficient way. Farming is an inherently risky business. Even my wheat farm, which is located in the rolling hills above the Palouse River, and considered some of America's most fertile ground, is vulnerable to serious weather events that can devastate my crops in any given year. I have been farming for more than three decades and I can say, without question, if it weren't for crop insurance I would not be in business. And, crop insurance is good for consumers and taxpayers, too. Without effective and affordable crop insurance, catastrophic production losses would sap the rural economy by setting in motion a series of harmful events: farm failures and consolidation, job losses, financial stress on rural banks and reduced investment in U.S. agriculture. Emergencies can happen to all of us. There have been enormous emergency bailouts for victims of floods, hurricanes, earthquakes and other disasters. But because of modern crop insurance, farmers have survived some of the worst production years in memory without that kind of disaster relief. Crop insurance fills the need. This reality is why I am always concerned by those who criticize farm policy or, worse, advocate for its demise, usually by spreading misinformation about the cost and mechanics of farm policy and crop insurance. One of the misconceptions is that crop insurance is a handout to farmers. Actually, farmers spend $4 billion a year out of their own pockets for insurance protection. They only collect an indemnity after they've suffered a verifiable loss and they've shouldered their deductible.Another attack includes barring farmers with large operations from participating in crop insurance. This would be foolish policy because any risk management pool needs a large and diverse group of participants. We want the most productive farmers in the pool to spread the risk. In the same vein, car insurers want safe drivers to buy insurance to help balance losses from more accident-prone drivers. A financially healthy rural economy requires a financially healthy farm production sector. And that sector relies on a safety net when catastrophic events happen. It is a modest investment considering the return, which is a stable and affordable national food and fiber supply.

Governments, coming one after another have been more interested in doling out "laddus" to the farmers in the form of a variety of subsidies and MSP regime for making the agriculture more viable and this cannot be ignored as they provide succor to millions under normal conditions. But when there are distress conditions like failed rains or droughts, compensation paid is paltry which cannot significantly reduce their debt burden in the event of crop failure. Almost 80% of the agricultural production in India depends on rains because of the painfully slow expansion of irrigation facilities. Under these circumstances why not Government come out with an insurance program for compensating those farmers suffering from contingencies due to crop failure? If Government can create a nuclear liability fund for covering nuclear reactor accidents, why not evolve a similar fund for insurance for farmers. Some of the programs of the present government like accident insurance at Rs 12 an year or the Atal Pension plan are really praise worthy. It is time Government focuses on evolving an effective crop insurance scheme and save the farmers from extinction.  


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