The rapid adoption of technology is perhaps one of the silver linings of this pandemic. It forced various industries to adopt tech solutions to resolve logistical issues and connect with various stakeholders. The agricultural industry is no exception to this digitalization and has made big leaps in the wide-scale adoption of emerging technologies. Be it IoT, precision farming, satellite imagery, digital loans, weather index-based insurance, or online mandis.
This can be aptly termed as Indian agriculture’s second revolution. Just as the green revolution changed the way we dealt with our food requirements, the Agritech revolution will change the way we grow nutritious food while ensuring maximum yield.
When any development involves financial risk, the first thing we must do is assess the risk to a sustainable level, ensuring that the various stakeholders don’t go out of business in case of any adverse eventuality. Unfortunately, the sector that accounts for 17-18% of India’s GDP hasn’t yet managed to diminish risks for its players, including the farmers, buyers, bankers, and even the insurers.
Smart farming for crop insurance can be a game-changer as it can ensure the following:
Satellite data for risk assessment: Insurance companies can improve their efficiency and risk cover with authentic data. Satellite imagery gives that extra cushion of safety to insurance risk when we have access to historical data and prior knowledge of extraordinary weather that can cause loss of crop.
Customization of weather-based insurance products: With smart farming, the insurer can be assured that a farmer is using the best techniques and safeguarding the crops as per scientific methods. Only extreme weather conditions can cause disruption to the expected outcomes, causing damage to the crops. Data-based insurance cover gives us the best-possible weather-based policy, benefitting both the insurer and the farmers. Tools like crop signatures can predict yields in an area and the impact of adverse conditions.
Choice of crop-based on risk attached and insurance coverage: On the basis of satellite imagery, precision farming techniques, and historic data, an insurer can make highly accurate risk calculations, thereby avoiding major losses. It also helps in the calculation of insurance premiums.
Ascertaining accurate insurance claim: When there is a claim pay-out, the insurer can gauge the precise stage of the crop’s growth and the expected loss to the farmer. For instance, the loss when a crop is just sown is significantly lesser than any loss that occurs at the last stage of the crop.
Streamlining claims process: The toughest part of the insurance cycle is the claims pay-out. The insurer has to first do on-field surveys and ascertain the damages as well as any disputes with the policyholder farmers. Satellite imagery data offers a far more efficient alternative through information on weather parameters, exact damages, stage of the crop. Quick access to this information can help us avoid conflicts, save survey costs, and reduce delays in pay-outs
Smart farming can help us bring immense efficiency to our agricultural processes. Exact data sets and scientifically proven techniques through agri-specific satellites will go a long way in ensuring a better customer and insurer experience. Most importantly, timely insurance can free our farmers from an endless cycle of debt, enabling them to concentrate on productive farming.