Crop Insurance Based on Payment of Ecosystem Services

Abstract

AbstractRisks arising out of erratic weather, variations in yields & prices; changes in government policies, international markets, labour availability, etc. are inherent to Indian agriculture and various schemes have been devised and operated over time to protect the farmers from losses that included guaranteed prices, subsidized inputs, credit and crop insurances. Since 1985, when the first ever complete crop insurance programme, namely, Comprehensive Crop Insurance Scheme (CCIS) introduced, the premium, crop coverage, sum insured, risk estimation, claim settlement etc. changed substantively in subsequent programmes like National Agricultural Insurance Scheme (NAIS), Weather index-based Crop Insurance Scheme (WBCIS), Modified National Agricultural Insurance Scheme (MNAIS), National Crop Insurance Programme (NCIP), and most recently introduced Pradhan Mantri Fasal Bima Yojana (PMFBY). The PMFBY is a transformative scheme and for its’ efficient operation, some technological choices have been projected like smart-phones, digital photography, remote sensing technologies (satellite and Unmanned Aerial Vehicles − UAVs), new statistical methods and modelling approaches, and IT/ICTs. However, still lacunae is there in terms of proper institutional framework low level of education and awareness that are the reasons for lack of reception among the farmers. There is scope for linking Payment to Ecosystem Services (PES) and Crop Insurance to put a value on earlier un-priced ecosystem services like regulation of climate, water quality and the habitat for wild animals and through this, gets them into the larger economic framework. Payment to Eco-system services (PES) comprises a sequence of payments to landholders or natural resource administrators in return for an assured stream of ecosystem services. A suitably structured PES scheme can deliver the essential inducements for fostering superior land management and improved delivery of ecosystem services. The willingness of farmers to accept new practices, which deliver added services be governed by awareness, attitudes, available resources, and also inducements.