5 crop insurance terminologies you should know about
The agriculture industry in India has always been one of the key contributors to the country’s growth. While this sector has been touted to grow by a steady rate of 2% each year, there are still many challenges that this industry faces.
To overcome these challenges, it is very important for farmers to have crop insurance policies that help secure them with financial coverage. Of course, understanding such insurance policies is vital before choosing one. So, let us study 5 of the most common crop insurance terminologies which will help us gain insight about such policies:
Notified area of a crop
If the crops from a notified area are damaged due to any natural calamity, then the farmers that have a crop insurance policy will be financially covered. The insurance policy will cover the crops that are recorded in the previous yield data and have been grown in the notified season. This notified area is decided by the State Government, as the size of this area depends upon the area that is under cultivation.
In the case of loanee farmers, the total sum insured should at least be at par with the amount of the crop loan that has been sanctioned to them. The farmer can then choose to increase the value of the threshold yield of the crop that has been insured.
Farmers who are covered on a voluntary basis are known as non-loanee farmers. For such farmers, the sum that is covered depends on the threshold yield of the crop that is insured. But not every farmer might be happy with the amount of the sum insured. For such farmers who want more coverage, they can choose a higher percentage of the average yield.
The term “Actual yield” refers to the yield per hectare of the crop which is calculated based on the total number of crop cutting experiments during the insured season, which are done for the yield of crop during the period in which the policy is valid.
In the case of a post-harvest loss, the coverage would only be available for a maximum period of two weeks from the time of harvesting. The damages incurred to the crops will be made on the basis of individual farms.
Now that you have learnt about these terminologies, you might want to search for a policy or a scheme that would be beneficial for farmers. One such scheme is the Pradhan Mantri Fasal Bima Yojana (PMFBY). This is a scheme that could be one of the most important assets of a farmer, as it provides financial security to those who have their crops damaged due to unforeseen calamities. This helps reduce the production risks that a farmer could suffer from. This scheme is optional for non-loanee farmers, but is compulsorily covered for the farmers that have taken loans for their agricultural operations.
We hope this article has been useful to you, take care!
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