Enabling farmers in India to cope with extreme weather events

The Centre for Science and Environment, New Delhi has recently come up with a report ‘Lived anomaly‘ that peeks into farmer’s experiences of extreme weather events in the light of climate change.

The report does a particularly interesting analysis of the chaos and politicization of the ‘relief’ scenario in the country. Chandra Bhushan in his foreword to the report notes how the CSE team involved in the study witnessed the “failure of all safety nets—the delivery of relief, inadequacies of crop insurance and the utter helplessness of farmers in India”.

The report states that “an underlying factor that pushes Indian farmers to the brink is the very poor economics of Indian agriculture that barely covers the cost of cultivation, particularly for small and marginal farmers”. Analysing the Government of India’s NSSO data the report says that “Almost 70 per cent of farmers in India—farmers with less than 1 hectare of landholding—are engaged in loss-making businesses under normal circumstances… Poor profit margins mean that the slightest variability in input factors, climate conditions or market prices at the time of harvest can push farmers deep into debt. The generally poor economics of the sector, indebtedness, crop failures, non-remunerative prices for crops and poor returns over cost of cultivation have led to over two lakh farmer suicides in India between 1990-91 and 2009-10. The proportion is alarmingly high in Maharashtra, Andhra Pradesh and Karnataka. Under such circumstances, even the slightest fluctuation, leave alone extreme weather events, can cause serious dents in the farming community”.

The current fundamentals of agriculture are too weak to provide respite to farmers, the report states. It specifically focuses on how to effectively provide relief and compensation to farmers in case of extreme weather events. Based on the learning’s the report suggests that safety nets can be built for Indian farmers by adopting good practices.

Specific suggestions of the study include:

  • Accurate and speedy assessment of crop damage is key to the delivery of relief and farmer-friendly crop insurance schemes. India is at a pilot stage in experimenting with remote sensing technology and satellite data, in combination with field-level data and models, to measure crop yields and crop loss at the farmer-field level. But there are several challenges in doing accurate and speedy crop damage assessment at the farmer level and disbursing relief and insurance payouts, such as lack of digitization of land records and the need to position constellations of satellites to make available timely yield images. There is a need to combine technologies such as ground location sampling, aerial images, satellite data and weather data (for instance, rainfall grid data). India needs to learn from global emerging practices in assessing crop damage.
  • There is a need to make the state-based ‘relief’ meaningful by addressing the present gaps. The relief amount should cover crop loss as well as input cost for next season. Sharecroppers and farmers taking land on lease or rent should also be protected. Crop losses less than the arbitrarily-decided minimum threshold of say 33 per cent should also be covered. Relief estimation by state governments and the Centre should be publicly reconciled. Otherwise, either deserving farmers will be overlooked or a large amount of money is sure to be siphoned off. There is a need to minimize political interference in relief estimation and delivery. A relief commission might be a good idea. State government should be judicious in declaring an extreme weather event. Relief should be delivered on time.
  • Crop insurance needs to be made affordable and feasible for farmers. Good product design with competition and flexibility in implementing schemes is needed as far as insurance schemes go. In the Indian context, crop insurance is available for notified crops at the beginning of the season and cannot be applied for after the cutoff date. For example, the cut-off date for the kharif season is 31 July and for rabi it is 31 December. Whether farmers choose single-peril or multi-peril insurance, the availability of the option provides the opportunity to choose risk protection from a single type of a frequently occurring extreme weather event in an area. Flexibility of different types of insurance products should be available for different crops. Effective public-private partnerships and substantial government subsidies are needed not just in the premiums paid, but also in underwriting any losses and reimbursing insurance companies for operating and administrative costs. Fast payouts through rapid assessments and the use of technology, such as remote sensing, Automatic Weather Station and mobile banking services are needed.
  • Direct linkages of farmers with the insurance companies should be built to avoid the confusion that arises when the banks play the role of intermediary. This is also reflected on the consequent lack of awareness among the policyholders about insurance companies and schemes.

The full report by CSE is available here

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