Insurance firms step in to de-frost vegetables

Barish Bima Yojna is the first weather insurance scheme offering fast processing of claims

With a large part of the potato crop in Uttar Pradesh destroyed by frost in January, insurance companies are now moving in to this entirely new sector of business by insuring major crops across India.

IFFCO-TOKIO General Insurance (ITGI), an Indo-Japanese collaboration between Indian fertiliser major IFFCO, and The Tokio Marine and Nichido Insurance Co Ltd, Japan, recently launched an insurance policy to protect wheat, the second major crop of north India, from both excess and deficit in normal rainfall that could damage wheat production in the country.

Providing information on the company's "Barish Bima Yojna", Ajit Narain, Managing Director and CEO, ITGI said almost two thirds of the Indian population earned its livelihood from agriculture, which in turn contributed 25 per cent to the country's GDP, and any adversities faced by this sector could affect the economy as a whole.

With such high stakes at hand, he said, it was imperative that a risk mitigation plan be in place. Though several crop protection schemes had been launched by various insurance companies in the country, this was the first time that a "Weather Insurance" policy had been launched by any company that provided farmers with an advantage of fast processing of claims and flexibility for the farmer to choose the sum insured based on his premium paying capacity.

He said wheat was the most important crop of India, which was mainly grown in the north Indian states, and any damage to this crop could have severe repercussions on the financial state of the farmers.