Agriculture is the core occupation for more than two-thirds of the population in Odisha. Majority of the cultivated area in the State is vulnerable to various types of climatic and other risks such as floods, drought, pests and diseases, hailstorms, etc. The state has been severely affected by several floods in the last 15 years, with eight being severe in magnitude including the devastating Fani cyclone in 2019. This climatic risk discourages agricultural investments and reduces crop productivity in the state.
International Rice Research Institute (IRRI) in collaboration with the Department of Agriculture and Farmers’ Empowerment (DAFE), Government of Odisha, aimed to support smallholder farmers through developing and making available cutting edge science and technologies under the project “Increasing Productivity of Rice-based Cropping Systems and Farmer’s Income” to enhance their resilience in the light of climate change. One of the objectives of the project is to develop socially acceptable crop insurance as one of the social safety net interventions to mitigate risks in rice production. Crop insurance helps secure and stabilize farm incomes by protecting against crop losses due to climatic risks. Providing financial safety net through insuring against crop loss is expected to spur farm investment, innovations, and adoption of technologies such as improved seeds, use of chemical fertilizers, machinery, etc.
A survey by IRRI in 2018 found that several farmers in Odisha resorted to seasonal migration, selling assets, and acquiring credit as strategies to cope with agricultural risks. Although the Indian government has been implementing a mega crop insurance program called “Pradhan Mantri Fasal Beema Yojana (PMFBY)” since 2016 which offers up to 60-70% of subsidy on premium, only 30% of the farmers had heard of PMFBY. Among the farmers who were aware, only 9% have registered in PMFBY. Odisha government data indicates that only 8-9% of the total farmers in Odisha have registered in PMFBY. This highlights the low awareness among Odisha farmers to adopt crop insurance as a risk mitigation strategy.
Dr. Prakashan Chellattan Veettil, Agricultural Economist at IRRI says “Farmers feel that the crop insurance information is complex. Comprehensive understanding of such information plays a vital role in their adoption decision”. Given the structure of current crop insurance which covers yield loss at Grama Panchayath level, Dr. Veettil believes that there are two key things the farmers must understand with respect to crop insurance. First, cost of insurance in the form of premium has to be borne whethere climatic risk is certain or not. Second, the occurrence of climatic shocks, as well as benefits from crop insurance in the form of claims, are uncertain in nature. Therefore, crop insurance might not be beneficial to all farmers in all circumstances. This makes it difficult to craft a thumb rule of advice for farmers during the crop insurance information campaign. Effective and innovative extension messages and information that enhances farmers' insurance literacy is the need of the hour to scale up the adoption of PMFBY.
IRRI scientists have designed and tested innovative educational training on holistic agricultural risk management in Odisha. The training program includes information about crop insurance (PMFBY) and stress-tolerant rice varieties (STRVs) which are tolerant to low-medium intensity flood and drought conditions.
Educational training includes three forms i) Classroom training, where farmers are trained for a day by a professional on crop insurance and STRVs; ii) Video Edutainment, a theatre-based video consisting crop insurance and STRV information is shown to farmers and, iii) Crop simulations app, which provides a virtual decision-making experience to farmers about alternative risk management options. Along with training, the experiences of farmers who have adopted crop insurance or STRV was shared to boost farmer motivation and peer-assisted learning.
Preliminary results of the impact of educational training have shown an increase of 30% in farmers’ insurance awareness and literacy. About 60% of the farmers who have attended the training have registered in PMFBY during Kharif 2019. Dr. Veettil adds, “Effective communication is a key instrument in scaling up micro insurance in agriculture. Evidence from our intervention is encouraging. We are still waiting for more data to ascertain the long run and livelihood impact of training and the adoption of insurance. The government and insurance companies should leverage these innovative training methods which target to improve farmers’ insurance literacy, so farmers can make a conscious decision about the adoption of insurance."
Dr. Yashoda: Senior Specialist-Behavioral Economics, IRRI
Ms. Deepti Saksena: Specialist- Communications, IRRI
Dr. Ranjitha Puskur: Research Leader-Livelihoods, Gender and Nutrition, IRRI