How technology can get insurance money into the hands of farmers in 24 hours

How technology can get insurance money into the hands of farmers in 24 hours

A loan of Rs 7,402. That’s all it took to drive farmer Ramnath Kewart to suicide on July 23 last year. Crushed by two consecutive droughts, Kewart had sold all his land and had no money left to repay the moneylender in his village in Bilaspur, Chhattisgarh. Kewart killed himself – one of 15,000 farmers committing suicide every year in India. 

Some who are younger soldier on in the hope that they may be able to turn the corner some day. Like Hanumant, whose lush crops in Maharashtra’s Pachewad Vasti were destroyed in one night of cyclonic rain and angry winds. It broke the family’s back. Hanumant and the women in the family now travel 25 km away in search of daily wage jobs like loading vegetables on trucks because farming has become unviable and dangerous. On a good day they make Rs 150 or sometimes only Rs 60. It is never enough. Their stomachs are rarely full. 

All this in Maharashtra state which is among the top growers of perishables, milk, grains and cotton in India. Imagine what it is like elsewhere in the country. Farming is largely completely dependent on the vagaries of nature, and the number of extreme weather events are only rising. 

In early March this year, in sheer desperation, 30,000 farmers trudged 180 kms over 6 days on foot from Nashik to Mumbai, braving unrelenting 40°C heat, calloused feet, fatigue and total uncertainty of outcomes just to let the world know their lot and convey their grievances to the not so responsive  government. 

It doesn’t have to be this way. That is not to say we have snake oil to fix all their troubles in one go. Yet innovation is most often a product of market inefficiencies. For instance, can we cut farmers’ losses by crossing agriculture with a smartphone’s computing power and the ability to geotag agricultural fields all over India? Yes, absolutely. It’s doable. All this technology is readily available. 

Harnessing the right technology available within India and globally can offer fast and dependable solutions to multiple issues of governance in agriculture sector providing most needed relief to the distressed farmers, cutting delays, inefficiencies, corruption and costs. Government of India’s flagship Pradhan Mantri Fasal Bima Yojna (PMFBY) is one glaring example crying for such a solution. Another targeted application can be creating geotagged databank of all waterbodies villagewise with actual volumes, etc. 

One telecom company, for instance, has already developed a platform for India’s 120 million farmers which offers access to real time market prices irrespective of distance. The same smartphone can click pictures of Hanumant’s crops which can be geotagged. That means zero ambiguity on location. All this brings legitimacy and a digital trail to what has always been defined in the most vague terms until now. 

Let’s drill this down to the specifics: The farmer uses a 4G feature phone linked to his Aadhaar number and bank account to take geotagged pictures of crop damage and uploads it. The backend software checks his land holding and last 10 years’ yield in that village, taluka and district. Digitised historical data of hyper-localised crop yields looped into artificial intelligence (AI) enabled software estimates damage and sanctions a benchmark payout which reflects in the insurance company’s computers. This, in turn, triggers a payment into the farmer’s bank account. This means no middlemen, no human error and no overhead costs. Digitised land records will have to be baked into this cake for all the other ingredients to make sense. 

Currently, crop insurance schemes cover farmers who typically see huge delays in getting the payout when their crops are destroyed. By embracing the right combination of technology and human intelligence, farmers can be paid at least 75-80% within 24 hours in best case scenario and a week at the latest compared with months or even years of delay today. 

It could also be used for severe local weather crop losses. For example, hailstorms destroyed crops; early rains destroyed fruits, heat spells over a week destroyed fruits and flowers. Use of smartphones, AI, and detailed local weather data that is already being collected can be used to provide immediate relief for farmers. 

Variants of such schemes are already up and running in the West. A start-up in Silicon Valley began by offering Total Weather Insurance based entirely on crop and location. Customers buy policies online. Premiums cost $30 per acre per year. Payouts for weather related crop failures are made without farmers having to prove losses. 

We, in India, can adapt these templates and can do better on many parameters, providing invaluable succour to distressed farmers. Farmers could take pictures of their farms from predetermined locations periodically (say weekly) and build a chronological data dump as a reference point in case of extreme weather related loss. The same process continues till harvest. Straightaway, the manpower bottleneck is removed and farmers are in charge of their content. Thus, villagers and not middlemen become the hub of crop data. 

Agreed, that farmers will not be quick to trust technology after many bitter harvests but making them partners in the process is a baby step towards winning them over. Insurance policies for India’s farmers must become a rite of passage in our fields. With a smartphone and high quality connectivity, we are already halfway there.

By BOA Bureau