International Journal of Advances in Science Engineering and Technology, ISSN(p): 2321 –8991, ISSN(e): 2321 –9009

Vol-6, Iss-1, Spl. Issue-1 Feb.-2018, http://iraj.in

AWARENESS AND PERCEPTIONS OF FARMERS ABOUT CROP
INSURANCE -A STUDY IN KOLAR DISTRICT OF KARNATAKA
STATE
1
SARASWATHI KUMBALEP, 2M. DEVARAJU
1
Research Scholar, Principal, University of Mysuru, Sri Krishna Degree College, Bangaluru Central University.
2
Prof. of Agribusiness Management, (Rtd), University of Mysuru,Mysore ,
E-mail: 1Mail2saru_kumbale@yahoo.co.in

Abtract - Protecting the interest of farmers is very important in any country basically to have sustainable economy and
food security. India is a developing country around 60–70 percent of Indian population (directly or indirectly) is
depending upon Agriculture sector and currently it contributes 16–17% of the GDP. Farming business involves various type
of risk such as uncertainties in weather, yields, prices, Government policies, global markets, and other factors that impact
the income of farmers. Hence the government has introduced crop Insurance to protect farmers from production risk
because of unfavorable weather. But the acceptance and the effect of crop Insurance is not up to the mark. Hence there is a
need to understand how to improve the performance of Crop Insurance. Researcher has used Multistage sampling in the area
chosen for the study to collect primary data and also she has used secondary data collected from the service providers.
Farmers still have lot of confusion about drought relief and Crop Insurance hence proper awareness regarding the procedure
to avail crop insurance, covering all types of crop and making it compulsory for farmers will help.

Keywords - Crop Insurance, Food Security, Farming Risk, Perceptions

I. INTRODUCTION mitigating tool. Hence there is a strong need to

understand the awareness and perceptions of farmers
Many researchers have worked on risk-mitigating about crop insurance.
measures. Lot of efforts are made by government
officials and private insurance service providers have II. OBJECTIVES OF THE STUDY
come up with different crop insurance and Weather-
based Crop Insurance. In spite of these, one finds that The main objective of the study is to examine
farmers are not in a position to effectively mitigate awareness and perceptions of farmers about crop
the risk they face. The study of the Directorate and Insurance. Keeping this in view following are the
Statistics (1984) in Karnataka on the rainfall-data specific objectives of the study
over 80 years indicated about 20 drought-years and
1. To analyze the perception of beneficiaries and
the highest number of drought years were
non-beneficiaries regarding the existing crop
experienced by Mandya, Kolar, Tumkur, Chitradurga
insurance schemes.
and Mysore districts. As a result, droughts have
2. To document the constraints faced by the farmers
become annual features in several parts of the State.
as well as the Insurance Agency in covering
This is an effort to analyze the awareness and
farming risks.
perceptions of farmers in kolar district of Karnataka
as kolar is one of the drought prone area and still III. HYPOTHISES
farmers of kolar contribute significantly to agriculture
1. Crop Insurance scheme is more successful in the
produce of Karnataka.
case of commercial crops than in the case of sub-
stream crops.
Farmers need to invest in farming every year. They
2. Crop Insurance scheme is more successful in the
may face huge cash crunch because of variation in
case of irrigated crops than in the case of rain-fed
yield or price in the previous season. Government
crops.
has introduced 0% interest crop loan for farmers for
a period of one year. This Short Term structure is a
IV. REVIEW OF LITERATURE
three tire structure with Primary Agricultural Credit
societies in rural areas, Co-operative Central Banks at
In an effort to identify the possible gaps in the
the district level and the Apex Bank at the state level.
existing research studies on crop insurance and to
Government has made crop insurance for the farmers
facilitate focusing of the present study on the un-
who have borrowed crop loan, so even if the farmers
researched areas, a review of some critical and more
faces production loss crop insurance has to help him
recent studies relating to farm insurance is attempted
to clear his loans and avail fresh loans and continue
in the following paragraphs.
his farming business. Still only about 23% of farmers
are using crop insurance and it is not clear what is
Kumar (2015) has analyzed that if thousands of
stopping them from using crop insurance as a risk
farmers are killing themselves on their ravaged fields,
Awareness and Perceptions of Farmers about Crop Insurance - A Study in Kolar District of Karnataka State

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 International Journal of Advances in Science Engineering and Technology, ISSN(p): 2321 –8991, ISSN(e): 2321 –9009
Vol-6, Iss-1, Spl. Issue-1 Feb.-2018, http://iraj.in
it's not just because the weather gods have been
brutal; it's also because the protection from such
climatic flippancy, in terms of crop insurance, has
failed the farmer when he needed it the most.
Wright (2014) concludes many of the analyses that
have presented arguments for the introduction of new
risk management strategies have not adequately
considered the portfolio of existing risk management
tools available to farmers and their costs and benefits.
McIntosh (2013) Analysed that the demand for
Weather Index Insurance, Pre launch demand seemed
high but after launch demand was low. Reasons for
this is identified as The information transmission
mechanism to farmers was inadequate for a new and
rather complicated financial product, such as Weather
Index Insurance and failure of marketing efforts.
Barnett and Mahul , (2008)has reported that
theEffective mechanisms for transferring risk can
catalyze investment and economic growth, thus
contributing to poverty reduction in rural areas of
lower income countries. Weather index insurance is a
relatively simple concept that under certain
circumstances can effectively transfer spatially
covariate weather risks.
Jennifer (2001)has found that the NAIS will not fix
the ills of Indian agriculture. Farmers could be given
an income guarantee not based on yield, price, or area
planted. crop insurance is a failure. Farmers don’t
know about it, or don’t have access to it, or find it too
expensive to take it. Insurers don’t push it as they
don’t make money on it. Governments have never
crafted it to be the focal point of managing risk in the
farming sector.
Atwoodet (1996)Analysed data from US agriculture
and indicated that the producer's first response to risk
is to restrict the use of debt. Price support programs
and crop insurance are substitutes in reducing
producer risk. The availability of crop insurance in a
setting with price supports allows producers to
service higher levels of debt with no increase in risk .
Hazell, Pomareda, Mishra (1986, 1986, 1996;) have
reported that Crop insurance is based on the principle
of large number, The losses suffered by farmers in a
particular locality are borne by farmers in other areas
or the reserves accumulated through premiums in
good years can be used to pay the indemnities. Thus,
a good crop insurance programme combines both self
as well as mutual help principle Crop insurance also
Tabulation and Analysis: Researchers has used SPSS software to analyze the data. Annova and Gatter’s
ranking.
Awareness and Perceptions of Farmers about Crop Insurance - A Study in Kolar District of Karnataka State
91
reduces the risk of becoming defaulter of
institutional credit. The reimbursement of indemnities
in the case of crop failure enables the farmer to repay
his debts
Mishra (1994) analyzed the impact of a credit-linked
Comprehensive Crop Insurance Scheme (CCIS) on
crop loans, especially to small farmers in Gujarat. It
is observed that CCIS had a collateral effect as
reflected through the increased loan amount per
borrower and reduction in the proportion of non-
borrowers among small farmers. It is observed that
insured households invest more on agricultural inputs
leading to higher output and income per unit of land
Horowitz and Lichtenberg (1993) found that in the
US Midwest Those purchasing insurance applies
significantly more nitrogen per acre (19%), spend
more on pesticides (21%), and treats more acreage
with both herbicides and insecticides (7% and 63%)
than those not purchasing insurance. These results
suggest that both fertilizer and pesticides may be risk-
increasing inputs
Ahsan (1971, 1982) According to Ahsan, access and
availability of insurance, changes the attitude of the
farmer and induces him to take decisions which,
otherwise, would not have taken due to aversion to
risk enables individuals to engage in risky activities
which they would not undertake otherwise
Walker and Jodha (1986) found that in the absence of
formal risk sharing or diffusion mechanisms, farmers
rely on traditional modes and methods to deal with
production risk in agriculture.
V. METHODOLOGY
Researcher has used both primary data and secondary
data for analyzing the awareness and perceptions of
farmers about crop insurance. Primary data is
collected using multistage sampling. Researcher has
chosen Kolar, Bangarpet andMulbagiltaluks
(Developed, moderately developed and under
developed taluks) and in each taluk two hoblis are
chosen and has collected data from ten farmers in
each hobli. Researcher has used separate schedules to
collect data from loanee farmers, non loanee farmer
and service provider. Researcher has also collected
data from the lead bank of Kolar to analyze the
number of farmers who have enrolled for crop
insurance during karif 2016-17 , Rabi 016-17 and
karif 2017-18.
International Journal of Advances in Science Engineering and Technology, ISSN(p): 2321 –8991, ISSN(e): 2321 –9009
Vol-6, Iss-1, Spl. Issue-1 Feb.-2018, http://iraj.in

Awareness and Perceptions of Farmers about Crop Insurance - A Study in Kolar District of Karnataka State

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 International Journal of Advances in Science Engineering and Technology, ISSN(p): 2321 –8991, ISSN(e): 2321 –9009
Vol-6, Iss-1, Spl. Issue-1 Feb.-2018, http://iraj.in

The table above shows that p>0.05 is not significant As such we accept Null hypothesis, that there is no
significant difference between the type of farmers and level of satisfaction in the crop insurance

In this premium subsidy by the government and experience with service provider are in the positive form.

VI. FINDINGS 5. Indemnity need to be increased and quick

settlement has to be done.
1. There is no significant difference between age
and earning capacity of farmers. VII. SUGGESTIONS
2. There is no significant difference between
education level and economic condition of 1. Proper awareness of crop Insurance schemes and
farmers. procedure to buy policy should be created.
3. Only twenty percent of farmers are aware of 2. All crops need to be covered to make it a strong
crop insurance. They feel making crop insurance risk mitigating tool.
compulsory is good. 3. Indemnity payment should meet the loss incurred
4. Farmers are satisfied with premium subsidy and it should not be negligible amount.
provided by the government and service
providers.
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 International Journal of Advances in Science Engineering and Technology, ISSN(p): 2321 –8991, ISSN(e): 2321 –9009
Vol-6, Iss-1, Spl. Issue-1 Feb.-2018, http://iraj.in
4. 4.Procedure to purchase Crop Insurance should
be made easy and at farmers door step or nearest
place
CONCLUSION
Farmers in kolar district are dependent on faming
and other sources for their livelihood. Good
awareness creation and providing crop insurance at
their familiar places like gram panchayat, credit co-
operative societies and post offices will increase the
percentage of farmers using crop insurance.
Communication on time to farmers regarding
purchasing crop insurance dates on media like
television, radio, road shows will help in creating
awareness. Indemnity level for crop insurance need to
be increased so that more farmers will opt for the
same.
BIBILOGRAPHY
Research papers –
[1] Mirnda - Area Yield Crop Insurance,:Nov 1991
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[4] Nicol RM, Ortmann GF, Ferrer SR. Perceptions of key
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Awareness and Perceptions of Farmers about Crop Insurance - A Study in Kolar District of Karnataka State
94
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