Bihar's Flooded Farmers Try Out New Insurance

Madhurpatti: When heavy rains swept through this village in northern Bihar in August and September, so much floodwater covered farmers' fields that it was difficult to tell one plot of land from another.

"After the flood, when we went out to see the land there was nothing there," said Babu Ram Rai, one Madhurpatti farmer. Rai and his neighbors - who farm a floodplain crisscrossed by rivers - are no strangers to flooding.

But as climate change brings intensifying rainfall in South Asia, the floods are worsening and so is their destructive potential. In August and September, the heaviest rains in several years in Bihar killed 514 people and affected 17 million more, according to Bihar's state disaster management authority.

Insurance policies for farmers could play a role in stemming the losses, experts say. But getting insurance right in India - from how fast help is delivered to how closely payouts match actual losses - has proved tricky.

Now, however, a new flood insurance effort being tried in six villages in Bihar aims to bring greater accuracy and speed to assessing and compensating crop damage from flooding.

The pilot project, backed by the Sri Lanka-based International Water Management Institute (IWMI), will insure 200 farmers for up to 5 million rupees Rs 50,70,000 ($78,000) in losses in total, with payouts made within a couple of months of a disaster.

"What we're trying to do is ... expedite the entire thing," said Alok Sikka, IWMI's representative in India.

GROWING RISKS

Between 2006 and 2015, the number of floods around the world increased but flood deaths dipped, particularly because of efforts to better prepare for such disasters in countries such as Bangladesh and China, according to the United Nations Office for Disaster Risk Reduction (UNISDR).

In India, however, flood deaths increased over the same decade, with 90 floods killing 15,860 people, compared to 13,660 deaths from 67 floods in the previous decade, according to UNISDR data.

Small-scale farmers represent close to 60 percent of the estimated 90 million rural households in India. A third of the country's farmers own less than half a hectare of land, or about one acre, according to government surveys.

In normal years, these farmers can earn enough to feed their families and replant for the following season. But their thin margins makes them especially vulnerable to any kind of accident or disaster.

Buying flood insurance is one way to cut the risks. But problems ranging from inaccurate damage assessments to delays in payments have plagued India's existing agricultural insurance efforts.

For example, research by the New Delhi-based Centre for Science and Environment found that information on crop damage often comes from local officials who file reports based on conversations or brief looks at affected areas, because they are unable to visit every farm.

"Sometimes there is a lack of resources... there are a lot of problems," said Vineet Kumar, a climate change programme officer at the research institute.

At times, government estimates of crop damage after a flood "don't actually match the actual situation", he said.

It's not for lack of trying. The government has almost continually revised and updated insurance schemes since launching them in 1985.

In Bihar, for example, the 2016 Pradhan Mantri Fasal Bima Yojna - the latest agricultural insurance effort - gives farmers payouts when certain weather triggers - such as rainfall levels - are reached.
But the scheme does not always capture the true extent of flood damage, experts say.

"If you go by the weather-based insurance, it says there is average rainfall" even when the farmer's fields are actually flooded, said Giriraj Amarnath, the lead scientist on the new IWMI insurance effort.

Under the new insurance programme, being carried out in collaboration with Bihar's government and private partners, including the Agricultural Insurance Company of India, expected damage to fields will be verified using satellite data and on-the-ground visits.

The duration of a flood, and its depth, will then be compared to historical data and used to calculate a threshold for crop losses. If that threshold is passed, a farmer will receive compensation, Amarnath said.

One of the biggest problems facing flood-hit farmers is that help - usually from government relief efforts - rarely comes fast enough to suit farmers, said Anil Sinha, a former vice chair of the Bihar State Disaster Management Authority who spent more than 30 years working as an Indian government administrator.

Usually, after a flood, a team from the state and central government makes field visits to assess the damage. They then submit reports that go through a number of committees before the government approves the release of a payout.

"By the time they come back, make the assessment, then that goes up to a cabinet subcommittee headed by the agricultural minister and finance minister ... a lot of time has passed," he said.

Pushing some of that relief money into insurance could help, Amarnath believes.

Right now, "the government only spends post-flood, never pre-flood," he said.

Rai, the Madhurpatti farmer, said that in 2009 he paid an insurance premium of 600 rupees and received a payout of 18,000 rupees after losing the crop to floods.

But the money came only the following year, he said - and he needed 50,000 rupees per hectare to plant again, including the cost of irrigating the land with diesel pumps.

Farmers also can come to resent paying for insurance each year if they don't suffer losses. "I've registered for insurance three or four times," Rai noted. "But I only received a payout once."

The IWMI pilot project, which began in 2015, will make payouts for damage from the August and September flooding in November, Amarnath said.

If the effort proves a success, partners hope to expand it and offer coverage to a million farmers in Bihar by 2025, said Amarnath of IWMI.