The working group on risk management in
Catastrophe Protection for Non-Borrowing farmers
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| 3.5. Catastrophe Protection for Non-Borrowing farmers Non-Borrowing farmers in the context of institutional credit sources, account for more than 50% of farmers. These non-borrowing farmers, who have limited recourse to institutional credit, have been largely left out of most of the governmental programs. At present, government provides relief during extreme climate events, but the quantum of such relief is largely ad-hoc and limited. A great majority of farmers avail credit from moneylenders, and are often led to the extreme step of committing suicide, if the crop fails fora season or two. In order to protect these non-borrowing farmers, from such drastic steps, the Group recommends introducing a Catastrophe Protection for farmers. The protection operates in extreme circumstances of large scale crop losses, on account of weather conditions. Catastrophe Protection could give a framework to such compensation, by bringing it under a statute. The broad steps in operating Catastrophe Protection are: (i) Determining the scientific and practical criteria to measure catastrophes. (ii) The government to obtain international reinsurance cover to finance payments during catastrophe years. (iii) Determining the channel and ways of releasing the payments to beneficiary farmers affected by catastrophes. Catastrophe payments to farmers are also practiced in other countries, including developed countries. The method of payment in USA, using insurance instrument is described below in the Box-1: Download 0.68 Mb. Share with your friends:
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