Making agricultural insurance faster, simpler and more accessible for Indian farmers

Technology, policy reforms and stronger last-mile networks can make agricultural insurance in India faster, simpler and more accessible, helping farmers manage rising weather and climate-related risks. | Photo Credit: SPECIAL ARRANGEMENT

Agricultural insurance is an important safety net for India’s farming community, particularly as unpredictable weather events and climate-related risks continue to affect crop yields and farm incomes. With over 100 million farming households dependent on agriculture, making insurance faster, simpler and more accessible is critical to protecting livelihoods. While flagship programmes such as the Pradhan Mantri Fasal Bima Yojana (PMFBY) have expanded the reach of crop insurance, challenges around claim settlement, documentation and awareness continue to limit its effectiveness.

Technology, supported by policy reforms and strong last-mile distribution, can help address these gaps and make agricultural insurance more responsive to farmers’ needs.

One of the biggest opportunities lies in reducing the time taken to assess crop losses and settle claims. Traditional Crop Cutting Experiments (CCEs), while important, can be supplemented with satellite imagery and remote sensing to assess crop health and identify the impact of droughts, floods and other weather events at scale.

Drones can further strengthen this process by enabling rapid assessment of localised damage caused by hailstorms, floods or other extreme events. Such technology-led assessments can improve accuracy and reduce dependence on lengthy physical inspections.

Parametric or index-based insurance can take this further by linking payouts to predefined weather conditions. Data from automated weather stations and IoT-enabled devices can trigger payouts when specified rainfall, temperature or other thresholds are breached. This can enable quicker settlements directly into farmers’ bank accounts.

For many farmers, the complexity of documentation and application processes can be as significant a barrier as the cost of insurance itself. Integrating digital land records with insurance platforms can reduce paperwork, minimise duplication and make policy issuance more seamless.

Mobile applications designed around rural users can also simplify the process. Multilingual interfaces, voice-based navigation and simple video-based loss reporting can make it easier for farmers to report crop damage within the prescribed timeframe.

Accessibility should not, however, depend entirely on smartphones or high-speed internet. WhatsApp-based services and USSD solutions can provide alternative channels for registration, claim updates and policy tracking, particularly in areas with limited connectivity.

Technology will have the greatest impact when supported by a strong grassroots network. Common Service Centres, Primary Agricultural Credit Societies, India Post Payments Bank networks and local Krishi Sakhis can serve as trusted touchpoints for insurance enrolment and assistance.

There is also a need to move towards more flexible products. Small and marginal farmers may benefit from micro-insurance covers tailored to individual crops, shorter crop cycles or specific climate risks, such as heatwaves affecting Rabi wheat.

Equally important is transparency around premium subsidies. Clearly communicating the government’s contribution and the farmer’s share typically 1.5–2 per cent for foodgrain crops and 5 per cent for commercial crops under PMFBYcan improve understanding and build confidence among non-loanee farmers.