Farmers Perception And Awareness About Agriculture Insurance Scheme – A Study Of North Karnataka

Agriculture is considered the backbone of Indian economy. The agriculture sector determines the growth and sustainability of Indian economy. About 52% of India’s workforce and 21% of India’s population still relies on agriculture for employment and livelihood. In spite of this, 197 farmers had committed suicide in 2015 in Karnataka (till September) and North-Karnataka accounted for 25 percent of such suicide cases compared to an average of 15 percent in remaining 5 regions of Karnataka (as per political map of Karnataka). As per the officials from agriculture department, none of the farmers who committed suicide had taken a crop insurance policy. These lives might have been saved if the crop is insured against climate change. As per the records of Agriculture Insurance Company of India (AIC) Ltd, only 16.3 percent of all farmers in Karnataka are covered under the NAIS. In the light of this observation, the researcher felt that it is high time to assess the awareness and existing knowledge about crop insurance among farmers. It is also necessary to assess perception of farmers about crop insurance. The study reveals that farmers have lot of faith in Pradhan Mantri Fasal Bima Yojana. They have strong confidence in PMFBY that it will provide security against Crop Loss. However, they opined that there is no provision in the policy for risk coverage of both Kharif and Rabi Seasons. It is suggested that crop insurance should be delivered along with crop loan through banks. The agriculture department (GOK) should conduct an awareness programme in collaboration with Management Educational Institutes. This will not only help in creation of awareness but also educating farmers about crop insurance


1.INTRODUCTION
Agriculture is considered the backbone of Indian economy. The agriculture sector determines the growth and sustainability of Indian economy. [1] About 52% of India's workforce and 21% of India's population still relies on agriculture for employment and livelihood. The agriculture sector is expected to play a vital role in India economy as it helps in poverty alleviation, preventing migration, ensuring food security, creating employment opportunities, social upliftment, regional and industrial development, foreign exchange earnings, easing inflation, etc. but, this sector is exposed to many risk. Among theme climate change is considered to be the major one. In recent years, the climate change has badly affected the Indian agriculture sector. The climate change had affected the crop growth and quality, livestock health, farmers' productivity, soil quality, pests, etc. Due to this, the rate of agri-GDP growth had turned out to be 2 percent per annum against a target of 4 percent during the first three years of the 12th Five-Year plan . The climate change is considered as major route cause for this problem. [2] The Climate change may be in the form of drought, flooding, cyclone, increased carbon dioxide, increased heat, deteriorating soil quality, unseasonal rain, etc. All these events severely affect farmers through loss in agriculture output and income and these are not in the control of farmers. This had in turn affected farmers repayment capacity resulting in distress selling of agriculture land and increase in suicide cases. N Maruti Rao (2020) and pulses, oilseeds and annual commercial/horticultural crops. The premium rates are 3.5% per cent (of sum insured) for bajra and oilseeds, 2.5% for other Kharif crops; 1.5% for wheat and 2% for other Rabi crops. In the case of commercial/ horticultural crops, actuarial rates are being charged. 50% subsidy in premium is allowed in respect of Small & Marginal farmers, to be shared equally by the Government of India and State/UT Govt. Presently the scheme is implemented by 24 States and 2 Union Territories. Since inception of the scheme and until (March 2015), 22.94 crores farmers have been covered over an area of 33.97 crore hectares insuring a sum amounting to Rs.349666.78 crore. The claims amounting to Rs. 33329.38 crores have been paid against the premium of about Rs.10598.75 crore benefiting about 5.92 crore farmers.

b) Modified National Agricultural Insurance Scheme (MNAIS):
To make agriculture insurance scheme easier and farmers' friendly, the government of India had introduced a Modified National Agriculture Insurance Scheme on full-fledged basis from 2012 onwards replacing existing insurance scheme. Under modified scheme, premium rates are worked out on actuarial basis, farmer pay premium net off subsidy. [4] The farmers have option for change of crop name after taking insurance coverage. Since inception of the scheme, 96.81 lakh farmers have been covered over an area of 108.36 lakh hectares insuring a sum amounting to Rs.21359.41 crore. The claims amounting to Rs. 1719.49 crores have been paid against the premium of about 2363.40 crore benefiting about 16.56 lakh farmers (upto 2015).

c) Weather Based Crop Insurance Scheme (WBCIS):
This scheme was launched in the year 2007 with the objective of covering the financial losses arising on account of crop loss resulting from incidence of adverse from adverse weather incidences such as rainfall, temperature, frost, heat, humidity un-seasonal rainfall etc. It is not Yield guarantee insurance. Etc. The major difference between NAIS and WBCIS is that the NAIS covers all risk whereas WBCIS covers only weather risks. The weather risks are mapped with monetary losses from nominal loss to total cost of cultivation. The premium has three components -farmer's share, state share and central share. Private insurance companies are allowed to participate in the scheme. They collect the premium but bear full claim responsibility. Under this scheme, the insurance of loanee farmers (farmers who have been extended credit through Kisan credit cards) is mandatory and for non-loanee farmers (farmers who don't have institutional credit), it is voluntary. Weather based Crop Insurance Scheme (WBCIS) operates on the concept of "Area Approach" i.e., for the purposes of compensation, a 'Reference Unit Area (RUA)' shall be deemed to be a homogeneous unit of Insurance. This RUA shall be notified before the commencement of the season by the State Government and all the insured cultivators of a particular insured crop in that Area will be deemed to be on par in the assessment of claims. Each RUA is linked to a Reference Weather Station (RWS), on the basis of which current weather data and the claims would be processed. In addition to Agriculture Insurance Company of India Ltd. (AIC) private General Insurance Companies i.e. ICICI-Lombard, IFFCO-TOKIO, HDFCERGO and Cholamandalam MS Ltd. have also been allowed for implementation of the scheme. From 2013 five more private insurance companies had also been allowed to participate in the scheme. Since inception of the scheme, 341.36 lakh farmers have been covered over an area of 459.87 lakh hectares insuring a sum amounting to Rs.62714.04 crore. The claims amounting to Rs. 4078.84 crores have been paid against the premium of about 5950.34 crore benefiting about 190.06 lakh farmers (upto 2015).

d) Pradhan Mantri Fasal Bima Yojana (PMFBY):
The Government of India had launched Pradhan Mantri Fasal Bima Yojana on 13th January 2016. Under the scheme, farmers will pay 2 per cent of premium fixed by insurance firms for Kharif crops and 1.5 per cent for Rabi crops. The remaining share of the premium, as in previous schemes, will continue to be borne equally by the Centre and the respective state governments. The government of India has allocated 3100 crores towards its share of the premium. The government has set a target of brining 50 percent crops under insurance in the next 3 years from the present level of 23 percent. The uniqueness of this scheme is that apart from Agriculture Insurance Company of India (AIC) Ltd, the public and private sector insurance companies have joined hands to offer insurance coverage. The companies who have joined the scheme include: 1) ICICI-Lombard General Insurance Company Ltd. The government of India has also launched an aggressive campaign to promote the scheme.

2.Present Status of Crop Insurance Schemes in Karnataka
Agriculture is the major occupation for a majority of the rural population in Karnataka. As per the population Census 2011, agriculture supports 13.74 million workers, of which 23.61 percent are cultivators and 25.67 per cent agricultural workers. A total of 123,100 km of land is cultivated in Karnataka constituting 64.6 per cent of the total geographical area of the state. The agricultural sector of Karnataka is characterized by vast steppes of drought-prone region and sporadic patches of irrigated area. [5] Thus, a large portion of agricultural land in the state is exposed to the vagaries of monsoon with severe agro-climatic and resource constraints. More than 60 per cent of Karnataka's workforce engaged in Agriculture. Therefore, Agriculture sector is considered to be main driving force of Karnataka's economy.
However, there was a fall in agriculture share in state domestic product from 17.04 percent in 2007-08 to 15 In the light of this observation, the researchers felt that it is high time to assess the awareness and existing knowledge about crop insurance among farmers. [8] It is also necessary to assess perception of farmers about crop insurance. There is a dire need to create awareness among farmers about crop insurance schemes. In this backdrop the present has been undertaken by the researchers. [9] 3.REVIEW OF LITERATURE J. Sundar and Dr. Lalitha Ramakrishnan made an attempt to measures the awareness level and source of awareness among farmers about crop insurance. [10] They had also examined the farmers' perception about crop insurance and their willingness in paying for crop insurance. They found that farmers' awareness level about crop insurance was low. Most of the farmers were not willing to pay for crop insurance because of instable income, premium rate, no or low compensation, problems with distribution channel and lack of financial knowledge. Phillip Daniel Daninga and Zhang Qiao assessed farmers' attitude towards drought insurance in Bunda district and found that farmers had negative perception about drought insurance on account of compensation fairness, convenience of service delivery, program appropriateness, and government's protection to farmers. [11] They suggested that farmers' attitudes and perception should be incorporated in developing effective drought insurance in Tanzania. S.B. Goudappa, B. S. Reddy and S.M. Chandrashekhar had conducted a study on farmers' perception and awareness of crop insurance. The study was conducted in North Eastern parts of Karnataka because region receives very less rainfall compared to other part of Karnataka and people of this region always suffering from drought.
The study revealed that majority of respondent (>80%) are not aware that crop insurance implementing agency and who pay's compensation. Almost all respondents are in the wrong perception that banks will pay compensation and are the implementing agency. More than three fourth of the insurance beneficiaries mentioned that bank compulsion was the motivation for opting insurance. Further more than 80% of respondents are not aware of extent of coverage premium paid, last date, procedure for insuring crops and method of loss determination and compensation worked out by agriculture insurance company.

4.RESEARCH PROBLEM
The government of India has launched insurance schemes to protect the farmers against climate change. [12] But, it was observed that insurance scheme have become just a policy documents and its reachability to farmers was not impressive as only 16.3 percent of farmers were covered by NAIS. This research is also intended to study the root cause for poor performance of the insurance schemes and suggest policy measures to overcome such problems. The research is also intended to investigate reasons for non-popularity of insurance scheme among farmers. [13]

5.OBJECTIVES OF THE STUDY
The study had been undertaken with the following objectives: 1. To measure the awareness level of Crop Insurance among farmers 2. To determine perception of farmers towards crop insurance 3. To investigate factors responsible for poor performance of crop insurance schemes 4. To offer suggestions to farmers for mitigation of risk against climate change 5. To offer policy recommendations

6.RESEARCH METHODOLOGY
This study is Descriptive in nature. 4 districts of North-Karnataka region where more number of suicide cases were reported have been selected for the purpose of study. 3 talukas have been selected from each district. 1 sample village is selected from select taluka and the details of the same are highlighted in the table-1. The field visit was conducted from January 2018 to June 2018. [14] 25 farmers were selected from each village as sample respondents. The total sample size is 375 respondents covering 15 villages. The data is collected through a Structured Questionnaire. A random sampling technique was used for selecting the villages and farmers. The responses were measured with a 5 pointer likert -type rating, where strongly agree (SA) = 5; Agree (A) = 4; Neutral (N) = 3; Disagree = 2; Strongly Disagree = 1. The data required for the study has also been collected from secondary sources such as Business-line newspaper, Website of Agriculture Insurance Company of India (AIC) Ltd, Karnataka State Natural Disaster Monitoring Centre and Department of Agriculture (GOK), research reports and journals. The study was conducted from January 2016 to June 2016. Data analyzed and presented in descriptive and narrative forms using mean, standard deviation, Z-score. The demographic profile of farmers and source of earnings were presented in table-2 and table-3     The mean score of awareness about National Agricultural Insurance Scheme is 2.04. It means that respondents' average response was "Disagree" regarding awareness while the standard deviation for the responses was 0.14. [15.16] The mean score of awareness about Pradhan Mantri Fasal Bima Yojana is 4.28. It means that respondents' average response was "Agree" regarding awareness while the standard deviation for the responses was 0.14. [17] The mean score of awareness about weather based crop insurance scheme, seasons covered by crop insurance schemes, premium rate, risk covered, insurance amount, procedures of insuring crops, agency offering crop insurance, method of loss determination, claim settlement process and claim settlement period is around 1. It means that respondents' average response was "Disagree" regarding awareness. [18,19,20] In other words, the farmers are unaware about these criteria of crop insurance.
Majority of farmers came to know about Pradhan Mantri Fasal Bima Yojana through Mann Ki Baat programme which was telecasted on All India Radio on 31st January 2016. [21,22]  For that the loss assessment was major factor which delays the claim in time. Therefore, it is suggested that Agriculture Department (GOK) should appoint or depute an authority in every district for loss assessment. It will greatly help the farmers to recover from bad agricultural years. This will influence non participating farmers to join PMEBY. 5. To be able to implement a PMEBY successfully, technical issues on the program implementation needs to be well prepared and information of the implementation modalities ought to be well shared among farmers. 6. It also suggested that government should release the subsidy on insurance premium on time. This is expected to influence the non-participating farmers to join PMEBY. The government should explore possibility of developing a blended loan cum insurance product which not only provide crop loan but also include risk coverage against crop failure and risk coverage against price fall. Keeping in mind the local conditions, it is also necessary to design conventional and customised products. The outcomes of the study are expected to give a new direction to crop risk management.