Indian farmers and insurance

| Foreign Markets |

India is one of the most dynamically developing countries in the world. Obviously, massive investment in farming is required to feed the population of over 1 billion people. Delhi authorities have recently launched a nationwide program to promote insurance for farmers, e.g. in case of natural disasters and weather anomalies.

A key issue

The primary challenge for Indian farmers is excess water appearing with the monsoon rains. Another issue are periodical shortages of water connected with seasonal droughts, and decreasing moisture of soil. Naturally, insurance policies covering water problems and poor harvest are becoming more and more popular. The terms of insurance deals for Indian farmers depend on the cultivated crop or the time of sowing.

The state helps the insured

In cooperation with private insurance companies, the government in Delhi and state authorities subsidize insurance premiums and possible compensation payments. Crops are therefore protected at each stage of development: before sowing, after harvest and in case of diseases, pests or natural disasters.

Meanwhile in Poland

Although Polish farmers are required to take out liability insurance and insure the buildings on the farm premises, the obligation is not enforced by local authorities, which are responsible for checking whether the law is observed. However, in case a natural disaster strikes, such as a drought or a flood, it is the central administration which covers most of the cost of helping the afflicted. Experience of the previous few years shows that local authorities do not have the resources necessary to cover the damages, and thus turn for help to the central government in Warsaw.

Another obligation concerns insuring crops covered by direct EU subsidies. The insurance payments are not subsidized by the state, which encourages the farmers to target production at the promoted types of crops.

Recent changes

In August 2013 the government approved a special program of aid for farmers who deal with the so-called special crops (e.g. tunnel crops), who suffered damages in natural disasters in 2013. The Agency for Restructuring and Modernization of Agriculture (ARiMR) will be able to subsidize the installments of loans taken out for a restart of activity, while the Chairman of the Agricultural Social Insurance Fund (KRUS) is allowed to delay or cancel the payment of social insurance. However, it is best to prevent damages as early as possible, paying insurance premiums and choosing the type of insurance coverage wisely.