Page 236 - India Insurance Report 2023- BIMTECH

224 India Insurance Report - Series II

Emergence of SpaceTech/AI/ML/SaaS

led Technological Interventions in the Indian

Agriculture Insurance and Value Chain

- Preeti Chaudhary
27 - Dr. R. N Sahoo – IARI/ICAR
- Hagit Cohen Fuks

1. Introduction

Between 2013 and 2020, the technology intervention in Indian agriculture as bee tremendous with
almost more than 50 tech. startups founded leading to rising internet penetration in rural India, and the
need for greater efficiency in the agriculture sector. Moreover, India’s regulatory environment is gradually
evolving to facilitate the growth of digital technologies in agriculture. Agtech in India continues to ramp
up - from core companies in the value chain using digital technologies like “super apps” to innovations
by start-ups, or “agrifintechs,” and large technology companies. Fully nurtured, the agtech ecosystem
has the potential to propel Indian farmers’ incomes to grow by 25 to 35 percent , and add $95 billion to
the Indian economy, through reduction of input costs, enhanced productivity and price realization,
cheaper credit, and alternative incomes. Despite the stellar growth of technology penetration across
various segments, we still have long way to go and a large part of Indian agriculture still remains exposed
to climatic risks despite, impressive development of agricultural infrastructure and irrigation potential.
Crop insurance provides a safety-net for farmers to mitigate losses arising from climatic shocks and also
encourages them to continue to invest in inputs and technology to increase yields and household income.
Although the need for crop insurance in India was debated for long, no serious efforts were made to
implement it. Between 1947 and 1985, there were isolated schemes of crop insurance. These pilot schemes
were generally crop or location specific. In 1979, a scheme based on area approach as suggested by V.M.
Dandekar, linking crop insurance with credit, was implemented by the General Insurance Corporation of
India (GIC). Under this scheme, the farmer was to be compensated in case of a shortfall in yield in the area.
The central government decided to introduce a country-wide crop insurance scheme commencing from
Kharif season of 1985 called Comprehensive Crop Insurance Scheme (CCIS). The CCIS was also based on
the approach described by Dandekar (1979). This approach was ‘Area’ based and the farmer was entitled
to compensation if there was a short-fall in the actual average yield per hectare in the area as compared to
the threshold yield as obtained on the basis of normal yield. A few modifications and improvements were
made to this Scheme and subsequently the National Agricultural Insurance Scheme (NAIS) was launched
from Rabi 1999. This was further improved and the Modified NAIS (MNAIS) was launched on a pilot
basis from Rabi 2010-11. It remained a pilot scheme till Kharif 2014. Subsequently it became a full-fledged
scheme under the National Crop Insurance Program (NCIP). Full details of these schemes, their operational