Current Challenges Faced by Farmers in Crop Insurance New Evidence from Indian Farmers

Abstract

Agriculture is an important economic activity because it is a way of life of the Indian people. Over 66 % of the population are engaged in agriculture and its allied activities but it is beset with manifold risk factors. The principal objective of this article is to explore and define the problems that are derived from the farmers’ perspectives. Hence, this paper is based on the primary data collected from the 500 farmers of 10 districts. A purposed scale is developed by using the exploratory-factor analysis method. The 8 factors obtained from the analysis contains 63.905% of the total variance and explained with Eigen-value over 1, and KMO value reported is (.803). The “Bartlett's Test of Sphericity” is another statistical test tool for determining the appropriateness of data that is determined to be 5952.713 (significant at 1%). The study has found that the lack of trust, high perceived cost, and cumbersome process of claim settlement are some of the problems faced by the farmers. Some other factors like insufficient official support, adequate assessment of compensation, absence of feedback from the farmers are hurdles identified in the crop insurance scheme. Lack of awareness about crop insurance among farmers, and “sheer profit” motive of insurance companies are the major problems in crop insurance from the farmers’ perspective as well.