Potential Role of Agriculture Insurance Schemes in raising productivity in India

Abstract

Agricultural insurance is a critical safety net for farmers, and India has implemented several policies to improve their access to such coverage. Nevertheless, achieving widespread availability continues to pose a significant challenge for policymakers. Multiple schemes have been introduced to strengthen the agricultural sector and enhance farmers' financial stability. This paper explores India's agricultural insurance programs, which, despite being an essential risk mitigation tool, remain out of reach for many. The sector is still developing in terms of coverage, scope, and accessibility. Farmers' discontent with existing schemes has further fueled negative perceptions, while low awareness and a preference for direct relief payments have limited adoption. Additionally, inefficient state-level implementation has reduced the effectiveness of crop insurance programs. As a result, only a small fraction of farmers have reaped the benefits. Greater government involvement is necessary to improve outreach and ensure that farmers can avail themselves of these schemes. Key challenges include effective execution in remote regions and ensuring aid reaches the most marginalized farming communities.