An Ex-post Evaluation of Crop Insurance: Risk Mitigation and Constraints among Pigeon Pea Farmers

Crop insurance in India aims to mitigate financial losses due to crop failures caused by weather aberrations, diseases and pest attacks. This article aims to assess and quantify the magnitude of yield loss and risk mitigation under Pradhan Mantri Fasal Bima Yojana (PMFBY). Additionally, it explores the constraints encountered by farmers from enrolment to compensation. The study relied upon survey data collected from 203 insured pigeon pea-growing farming households in the Bidar district of Karnataka, India. The findings reveal that PMFBY failed to fully compensate for yield losses, with an average of 58% of expected claims remaining unsettled, resulting in a shortfall of approximately ₹3,500 per acre. Principal component analysis identified six constraint factors, while a multiple regression model showed that women farmers, those with lower education levels, marginal and small farmers and tenant and sharecroppers are more likely to encounter challenges under PMFBY. The outcomes of the research article prompt us to reconsider and revamp the crop insurance policy in India. To bridge the gap between farmers’ perceived loss and calculated loss, there is a need to modify the yield estimation method. Addressing farmers’ constraints is anticipated to significantly boost farmer participation and encourage broader acceptance of crop insurance programmes.