Weather based Crop Insurance Scheme (WBCIS)

Q1: What is Insurance?

Insurance is a tool to protect you against a small probability of a large unexpected loss. It is a technique of providing people a means to transfer and share risk where losses suffered by few are met from the funds accumulated through small contributions made by many who are exposed to similar risks. Insurance is not a tool to make money but a tool to help compensate an individual or business for unexpected losses that might otherwise cause a financial disaster.

Q2: What is Crop Insurance?

Crop insurance is a means of protecting the agriculturist against financial losses due to uncertainties that may arise from crop failures/losses arising from named or all unforeseen perils beyond their control.

Q3: What is Weather based Crop Insurance?

Weather Based Crop Insurance aims to mitigate the hardship of the insured farmers against the likelihood of financial loss on account of anticipated crop loss resulting from incidence of adverse conditions of weather parameters like rainfall, temperature, frost, humidity etc.

Q4: How is Weather Insurance different from crop insurance?

While Crop Insurance specifically indemnifies the cultivator against shortfall in crop yield, Weather based Crop Insurance is based on the fact that weather conditions affect crop production even when a cultivator has taken all the care to ensure good harvest. Historical correlation studies of crop yield with weather parameters help us in developing weather thresholds (triggers) beyond which crop starts getting affected adversely. Payout structures are developed to compensate cultivators to the extent of losses deemed to have been suffered by them using the weather triggers. In other words, Weather based Crop Insurance uses weather parameters as ‘proxy’ for crop yields in compensating the cultivators for deemed crop losses.

Q5: What is Weather based Crop Insurance Scheme (WBCIS)? How is itdifferent from National Agriculture Insurance Scheme (NAIS)?

Weather based Cro is a unique Weather based Insurance Product designed to provide insurance protectiop Insurance Scheme (WBCIS)n against losses in crop yield resulting from adverse weather incidences. It provides payout against adverse rainfall incidence (both deficit & excess) during Kharif and adverse incidence in weather parameters like frost, heat, relative humidity, un-seasonal rainfall etc. during Rabi. It is not Yield guarantee insurance.