With the Narendra Modi government vigourously pushing its flagship Pradhan Mantri Fasal Bima Yojana (PMFBY), the general insurance industry is expecting total premium income from the space to touch Rs 23,000 crore during the current 2017-18 financial year.
This would be a 400 per cent hike in the mop of premium from crop insurance from Rs 5,700 crore during 2015-16, when the scope of the scheme was limited. The premium income had risen to Rs 21,500 crore last year (2016-17) with the Modi dispensation expanding the purview and reach of PMFBY.
The premium payment towards Fasal Bima scheme is shared by the farmers and the central and state governments. The farmers contribute a miniscule amount of the premium and the rest is shared equally by the central and the state governments.
Last year, UP had accounted for roughly Rs 1,100 crore of the Fasal Bima premium collection of Rs 21,500 crore. While Fasal Bima has been made mandatory for loanee farmers (farmers taking crop loan from banks), even non-loanee farmers, including share-croppers, are included under the PMFBY. The Centre has projected agriculture to grow by 4.1 per cent.
“Our estimates show the premium collected on all India basis would go up to Rs 23,000 crore during 2017-18 and the Fasal Bima would become a major part of the Indian general insurance industry,” ICICI Lombard, Executive Director, Alok Agarwal told Business Standard here.
The Centre is targeting to cover 50 per cent farmers to be covered under PMFBY by 2019.
He said ICICI Lombard was employing both physical reach and digital technology to reach non-loanee farmers across 9 districts in Uttar Pradesh for maximum coverage of both loanee and non-loanee farmers in the districts allotted to the company.
For the Fasal Bima (crop insurance) under PMFBY, the general insurance companies bid for the clusters (comprising districts) in a bidding process. There are 12 such clusters in UP, which has total of 75 districts, of which ICICI Lombard had been allotted one cluster, while the rest 11 clusters are being provided insurance cover by Agriculture Insurance Company of India Limited (AIC). The bidding for the current financial year are to be held later this month.
The company was providing Fasal Bima in Andhra Pradesh, Madhya Pradesh, Meghalaya, Odisha, Tamil Nadu, Jharkhand, West Bengal, Meghalaya and Haryana as well.
Besides, ICICI Lombard has partnered with North East Centre for Technology Application and Research (NECTAR), which uses drones and remote sensing technology for village wise and crop wise yield estimation. The project, undertaken during the 2015-16 rabi season, is being implemented in kharif as well.
Drones are also being used for capturing different images for crop classification and monitoring crop health using vegetation indices. Besides, drones can capture a bigger area for observing the crop which is a tedious task in case of manual ground sampling, thus aiding quicker yield estimation.