Awareness Level of Farmers Regarding Crop Insurance in Haryana

Haryana is predominantly a farming state involving 65% of population in agriculture directly or indirectly, in spite of recent industrial development. The state has achieved a notable growth in its agricultural sector, which made Haryana self reliant in food production. But, the farming community is vulnerable to various types of risks and uncertainty in terms of prices and yield of their product. In worst case scenario their entire effort may go waste in the event of a natural calamity. The weather conditions and market oriented environment in general happen to woeful to the stability of their income. The insurance is one the robust tool developed by economics to overcome the risk. But insurance is a financial product and required minimum awareness to get the understanding of its complexity. At present, crop insurance coverage in India is 23% only. States like Punjab, Haryana, Madhya Pradesh, Uttar Pradesh (western region) are low crop insurance coverage areas. The main reason for low coverage is farmers having little awareness about insurance schemes. They are not aware of how the scheme works. One reason for underpenetration of crop insurance in Haryana may be the most parts of the state are covered under irrigation facilities that protect farmers from conventional weather risks. To insulate farmers against risks in agriculture, government has launched several schemes such as National Agricultural Insurance Scheme and weather index based crop insurance schemes. Recently to stabilize the farm income and overcome the distress among farmers due to crop failure present Indian government has also taken number of steps to promote crop insurance among the farmers. In this process it has also launched a carefully designed crop insurance policy named as Pradhan Mantri Fasal Bima Yojana which is accessible and economical to all variant of farmers. The coverage of insurance schemes seems to be limited among the farmers primarily due to lack of full information. In this paper, we have tried to examine about the awareness condition of the households regarding crop insurance. The study has reported the results of a survey of 567 farmers in Haryana conducted to assess their awareness level about various facets of crop insurance and its schemes. The paper also tried to explore the factors affecting farmers' decisions regarding crop insurance. The study found that awareness level of farmers about crop insurance is low due to lack of information.