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Evaluation Study on Pilot Weather Based Crop Insurance Scheme (WBCIS)

A Weather Based Crop Insurance Scheme (WBCIS) has been piloted across India since Kharif 2007 season to explore the effectiveness of Weather Based Crop Insurance as an alternative to the National Agricultural Insurance Scheme (NAIS). WBCIS has transformed the domain of agricultural risk management in India. During the year(2010-11), AFC has completed a Study on Weather Based Crop Insurance Scheme (WBCIS) for Ministry of Agriculture, GoI to explore the effectiveness of Weather Based Crop Insurance as an alternative to the National Agricultural Insurance Scheme (NAIS). The study findings brought out that the implementation of a well-planned and integrated weather data management system in India can alleviate many problems associated with WBCIS such as the delays in claim settlement under weather insurance or the weak design of WBCIS policies. It was observed that despite its positive experiences, the innate limitations of weather insurance have raised questions about its ability to replace area yield insurance. It was suggested that till the time remote-sensing technology becomes so reliable and cost-effective, it could be utilized for loss assessment of crop insurance units, the crop insurance sector in India will go through a transitional phase wherein NAIS and WBCIS can play the role of either complements or alternatives, but not substitutes. The study report was well received and the study recommendations were appreciated by the Government as well as the Scheme Implementing Agencies.