Managing Risk in Agriculture: A Study of Crop Insurance in Kerala
Kerala agriculture had been facing an unprecedented crisis ever since its growth rate decelerated in the late nineties. The major factors attributed to this deceleration in agriculture performance were climatic irregularities, liberalisation of agriculture trade and high degree of price volatility due to international market price behaviour. With 80 percent of rainfed cropped area, the irregular climatic conditions cause severe growth fluctuations in state’s crop production. Thus, Kerala farmers are subjected to greater risk where they are trapped in the vicious circle of indebtedness leading to the extremity of suicide. The role of crop insurance as a saviour of farmers, absorbing the shocks of unforeseen agriculture crisis arises here. The state government has timely implemented centre sponsored crop insurance schemes and has also made palpable attempts in launching state sponsored crop insurance scheme in this perspective.
The present paper critically examines the trend and performance of various crop insurance schemes implemented in Kerala over the years. It also compares the financial viability and penetration of these crop insurance schemes bestowing a clear picture of its manoeuvre. Claim premium ratio, percentage of benefitted farmers, break even ratio, compound annual growth rate, average penetration rate, absolute and relative change were exercised for reaching into conclusion. It was found from the study that all the crop insurance schemes implemented in the state were financially unviable and had a very meagre penetration rate indicating its unsuccessful performance.
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