Weather-based insurance model: risk-reducing solution for farmers

Agriculture has always been dependent on the vagaries of the weather. Lack of timely rains or sudden changes in the weather cause heavy losses to farmers. Keeping this in mind, a new initiative has been taken with the help of science and technology, called the weather-based insurance model. This model has been specially designed for farmers so that they can avoid risks caused by weather and make safe investments in farming.

What is the weather-based insurance model?

The weather-based insurance model is a modern way to protect farmers’ crops from natural disasters. In this, the insurance cover depends on how the weather behaves in a region. This insurance model is based on parameters that are directly affected by the weather, such as rainfall amount, temperature, humidity, and wind speed. If abnormalities are found in these parameters, the farmer gets insurance benefits.

For example, suppose a farmer has taken weather-based insurance for his crop, in which it is stipulated that there should be a certain amount of rain in the area for good crop yield. If it is stipulated in the insurance policy that at least 100 mm of rain is necessary and the rainfall that year is only 60 mm, then it will be considered a drought situation. In this situation, the insurance company will decide whether the farmer should get compensation based on satellite data and accurate information received from weather stations. Insurance policies provide cover for such situations, so the farmer gets a certain amount as compensation for his loss. This compensation gives financial relief to the farmer, so that he can prepare for farming in the next season and meet the needs of his family.

How insurance works

It is very easy to understand how the weather-based insurance model works. This entire process is based on modern science, technology and data analytics. Let us understand this in detail in simple language:

1. Data Collection

• Use of weather stations and satellite systems: Insurance companies collect meteorological data from various sources. This includes information obtained from weather stations established locally and nationally as well as data from satellites. This data measures important parameters such as rainfall amount, temperature, wind speed, and humidity.

• Agricultural science research: Research is also done to collect information about the soil of the fields, crop conditions, and local weather. This scientific process helps insurance companies to make better decisions.

2. Weather Forecasting

• Use of modern technology: Weather-based insurance models use modern technology, such as big data analytics and machine learning. These techniques make accurate forecasts of the future by analyzing old weather records and existing data.

• Long and short term forecasting: Insurance companies study weather trends and find out what kind of impact a particular season can have on the crop. This information is very useful for farmers.

3. Designing Insurance Policies

• Insurance companies create special insurance policies for different crops and regions. These policies are prepared keeping in mind the weather conditions and local risks. For example, if an area is more prone to drought, then that risk will be covered in the insurance policy.

• Customization: The policy is designed according to the local climate and crop so that farmers can get maximum protection.

4. Assessment of Loss

• When there is a major change in the weather, such as a sudden drought or heavy rain, insurance companies use weather data to assess how much damage has been caused to the crop.

• Automated process: Due to modern technology, this assessment process has become very fast and automated. The condition of crops is accurately estimated through satellite images and sensor technology, so that the damage can be assessed at the right time.

5. Release of insurance compensation

• Insurance companies release compensation after assessing the damage. This process is much faster than the traditional insurance model. Farmers do not have to wait for a long time, and their compensation is deposited directly into their bank account.

• Transparency and simplicity: Farmers do not have to go through complex processes to receive the insurance amount. The entire process is digital, which maintains transparency and simplicity. 

Features from a scientific point of view

1. Meteorology: This science studies the mood and changes of the weather. It uses satellites, weather centers, and forecasting models. These techniques help farmers to take the right decisions at the time of sowing and harvesting crops.

2. Satellite technology: Satellite technology is used for the safety of farmers. This technology gives accurate information about the condition of crops and weather conditions by assessing the land on a large scale.

3. Machine learning: Machine learning is now also used in weather forecasting. This technology can predict future potential dangers in advance by looking at old weather data. With this, farmers can protect their crops by estimating the changing mood of the weather.

Benefits to farmers

Weather-based insurance model provides many important benefits to farmers. It not only reduces the risk of farming but also strengthens their financial position. Let us understand this in detail:

1. Risk Reduction

• Protection from natural disasters: The biggest threat in farming is natural disasters, such as drought, flood, unseasonal rains, storms, etc. Weather-based insurance model provides protection to farmers from these disasters. Whenever there is a sudden change in the weather and the crop is damaged, insurance companies compensate the farmers, so that they can avoid heavy losses.

• Relief from uncertain weather behavior: In many places in India, the weather is very uncertain. This insurance model gives farmers the assurance that if the weather becomes adverse, they will definitely get financial assistance.

2. Economic Stability

• Stability in income: Farmers have to suffer huge losses when the crop is damaged, which affects their income. Weather-based insurance provides economic stability to farmers. If their crop is damaged, they are compensated, so that there is no major setback in their income.

• Safe investment: Whatever investment farmers make in their farming, such as seeds, fertilizers, pesticides, etc., is safe. By getting the benefit of insurance, they can prepare for their next crop and avoid financial crisis.

3. Timely and Accurate Compensation

• Automated process: The process of giving compensation in the weather-based insurance model is much faster than traditional insurance. Crop loss is assessed through modern technology, such as satellite images and sensor data. Due to this, farmers do not have to wait long and they get immediate assistance.

• Digital payment: Compensation is deposited directly to the farmers’ bank account. This not only maintains transparency but also reduces the possibility of corruption. Farmers do not have to go anywhere to get compensation.

4. Transparency and Trust

• Simple and transparent process: The insurance process is completely transparent and easy for farmers. Insurance companies assess the loss based on data received from satellites and weather centers, so there is no possibility of any kind of manipulation. Farmers can trust this process and easily get their insurance amount.

• Reliable system: The government and insurance companies working together makes this model reliable for farmers. Farmers are confident that their insurance cover will be available on time and without any hassle.

5. Improvement in Crop Production

• Helpful in better planning: Farmers can plan their crops better by having weather information and insurance cover. They know that they have a means of protection in case of any natural disaster, so they do not hesitate to take risks and can dare to adopt new agricultural techniques.

• Use of new technologies: Getting insurance cover encourages farmers to adopt new technologies and advanced agricultural methods in crop production. They can grow crops with more productivity and better quality.

6. Peace of Mind

• Reduces stress: Farming is a risky business, and farmers are often stressed due to the changing mood of the weather. Weather-based insurance provides mental peace to farmers, as they know that they will definitely get financial assistance in case of any disaster. This allows them to focus on their farming.

• Family maintenance: When the crop is damaged, it affects the entire family. With insurance cover, farmers are able to meet the needs of their family and there is no problem in children’s education, household expenses, etc.

Government initiatives and contribution

The Government of India has launched several schemes for the protection of farmers. The aim of these schemes is to protect farmers from the effects of natural disasters and climate change.

1. Pradhan Mantri Fasal Bima Yojana (PMFBY): This scheme is designed to protect crops from natural disasters. Insurance is made available to farmers at a nominal premium, and in case of loss, compensation is deposited directly into their account. It uses satellite data, weather stations, and modern techniques to make the loss assessment accurate.

2. Silk Insurance Scheme: This special insurance scheme is for farmers who produce silk. It aims to cover losses caused by natural calamities in silkworm rearing. 

3. Weather Based Crop Insurance Scheme (WBCIS): This scheme provides insurance cover for crops according to the weather. It provides insurance benefits based on rainfall, temperature, wind speed, and other weather-related factors. This makes it easier for farmers to face weather-related risks.

4. Pradhan Mantri Kisan Samman Nidhi Yojana (PM-KISAN): Even though this scheme is not directly linked to insurance, it is very important for strengthening the economic condition of farmers. Under this, small and marginal farmers are given financial assistance of Rs 6,000 every year, so that they can mobilize the necessary resources for farming.

Weather-based insurance models and government crop insurance schemes can prove to be a boon for farmers. With the help of scientific approach and modern technology, these models help protect farmers from the dangers of climate change and keep their income stable. Efforts of the government and the scientific community are ensuring that farmers get accurate information and compensation at the right time. Farmers should get as much information as possible about these schemes and take advantage of them in their own interest.