All posts by Elia Riesling

The Importance of Crop Insurance and how it will benefit farmers

70% of the global land use is for agriculture, rangeland and forestry. In Africa alone, agriculture accounts for 70 percent of full-time employment, 33 percent of total GDP, and 40 percent of
total export earnings.

Between 2003 and 2013, there were 78 disasters caused by all types of natural hazards, including climate-related events. This number has doubled since the 1980s. In a span of ten years, it has affected close to 1.9 billion people and caused over USD 494 billion in estimated damage. The total economic damage is estimated to be $1.5 trillion.

Out of this total, close to 25 percent of the economic impacts is borne by the crop, livestock, fisheries and forestry sector.  The surge in climate change-related disasters poses growing threat to food security.

“Small-scale farmers, fisherfolk, pastoralists and foresters – from Myanmar to Guatemala and from Vanuatu to Malawi – have seen their livelihoods eroded or erased by cyclones, droughts, floods and earthquakes,” said FAO Director-General José Graziano da Silva, 2015.

According to a report from the Food and Agricultural Organisation of United Nations(FAO), agriculture is the single most affected sector by droughts, absorbing on average about 84 percent of all the economic impact.

This situation is expected to worsen unless effective measures are taken to protect the agriculture sector. With the increase in population, there is immense pressure to increase food production, boost security and protect farms.

Some of the Impact of Natural Disaster on Agriculture

  1. Loss of perennial crops such as garlic, banana and rhubarb
  2. Inability to use the land until water recedes in the case of floods
  3. Permanent increase in salinity making the land unsuitable for production
  4. Decreased production leading to lower farmers income
  5. Increase in unemployment threatening rural livelihood

What is Crop Insurance

When Agriculture is synonymous to disasters and risks beyond our control, it is necessary to take precautionary measures to control damage faced by farmers. A crop insurance plan assists in the stabilization of crop production and reduces the negative impact it has on the lives of the farmers. Considering the current scenario, crop insurance has become a necessity for agricultural-related issues.

Each year, there are new technologies invented to help farmers get more produce from their investments. Since the new investments are risky, insurance packages help the farmer to try new technologies. The insurance companies allow farmers to get insurance covers for the new technologies such that if they fail, farmers will not get losses as the insurance company compensates them.

Advantages of Crop Insurance

Farmers who take crop insurance protect their crop from unforeseen setbacks. Considering that majority of the farmers livelihood is dependent on the quality and quantity of the yield they produce, crop insurance aids in fighting poverty.

The advantages of crop insurance are,

(i) Stability in Income: It protects the farmers against losses caused by crop failure. It acts like a tool that allows farmers to manage their yield and price risks.

(ii) Minimal Debts: Farmers are able to repay their loans even during the time of crop failure with the support of the right insurance partner.

(iii) Technological Advancement: Insurance companies work along with Agri platforms who use IOT to enhance agriculture practices and reduce farmers losses. This helps farmers to understand latest technological advancement and improve their crop production.

(iv) Yield Protection: Crop Insurance protects farmers against  production loss for crops. It also offers preventive planting and replant security.

(v) Provides Awareness: Insurance companies provide awareness campaigns to help farmers understand the effect of natural calamities and also protect their farms.

While a natural disaster is unpredictable, farmers can use forecast methodology to understand climate and weather change to protect their crops. Therefore, one of the most important benefit of buying agriculture insurance is that farmers get peace of mind.

Since major impact of the natural disasters is on poor farmers with limited means in developing countries, it is necessary to use data, technology and financial services to solve climate related challenges.

Weather Risk Management services provides insurance cover to clients ranging from Governments and large Corporate houses to poor peasants in remotest of villages. With the help of Big Data, Analytics, Smart Devices & Financial Services, we have served over 1 Million farmers and have transformed their lives. We have also saved half a million farmers who were struck by natural disaster using weather Insurance.our vision is to secure smiles for all of using pioneering new analysis, technology and innovation to provide security against climate change. A robust and intelligent Historical Data Manager contains historical weather to help farmers plan and schedule their harvest and yield. With the help of crop insurance, farmers will benefit by becoming self-sufficient. They will also be able to raise their investment in crops to get better quality produce.