Aquaculture Crop Insurance

Context

• On 1 November, 2023 Meeting on Aquaculture Crop Insurance scheme for Shrimp and Fish organized by Ministry of Fisheries, Animal Husbandry & Dairying.

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• To discuss and comprehend technical problems in the implementation of Aquaculture Crop Insurance scheme for Shrimp and Fish farming under the ongoing Pradhan Mantri Matsya Sampada Yojana (PMMSY) scheme.

• To mitigate the risks faced by aqua farmers, NFDB (National Fisheries Development Board), which is the nodal agency for implementation of PMMSY, proposed to implement the Aquaculture Crop Insurance scheme.
• The Scheme aims to provide basic cover for brackish water shrimp and fish on pilot basis for one year in the selected States of Andhra Pradesh, Bihar, Gujarat, Madhya Pradesh and Odisha.

What is Aquaculture?

• It broadly refers to the cultivation of aquatic organisms in controlled aquatic environments for any commercial, recreational or public purpose.
• The breeding, rearing and harvesting of plants and animals takes place in all types of water environments including ponds, rivers, lakes, the ocean and man-made “closed” systems on land.
• Purposes:

1. Food production for human consumption,
2. Rebuilding of populations of threatened and endangered species,
3. Habitat restoration,
4. Wild stock enhancement,
5. Production of baitfish, and
6. Fish culture for zoos and aquariums.

Aquaculture Insurance and it’s Need

1. Aquaculture Insurance: Type of insurance specifically designed to provide coverage and financial protection to individuals or entities involved in aquaculture, which is the farming of aquatic organisms, such as fish, shrimp, and other aquatic species, for commercial purposes.
2. Need:

 

1. Insurance safeguards substantial investments in infrastructure, ensuring that the financial resources put into the operation are protected against unforeseen events.
2. The availability of aquaculture insurance can boost investor and farmer confidence in the industry and encourage individuals to invest in aquaculture and expand their operations.
3. Insurance can promote the sustainability of aquaculture operations by providing a means to recover from unexpected setbacks, this, in turn, can encourage responsible and sustainable practices in aquaculture to reduce risks and insurance premiums.
4. Aquaculture is susceptible to various risks, including diseases, adverse weather conditions, water quality issues, and natural disasters.
5. These risks can lead to significant financial losses for aquaculture farmers. Insurance helps manage and mitigate these risks by providing financial compensation in the event of such adverse events.

Challenges in Implementing the Aquaculture Crop Insurance Scheme

1. Data Collection and Assessment:

1. Assessing the risks and setting appropriate insurance premiums require accurate and up-to-date data.
2. Gathering such data for aquaculture can be challenging, as it involves complex environmental and biological factors.

2. Awareness and Education:

1. Many fishers and farmers may not fully understand the concept of insurance. Raising awareness and providing education on the benefits and processes of the insurance scheme is essential for its successful implementation.

Way Forward

1. The Aquaculture Crop Insurance scheme under PMSSY aims to reduce risks for fishers and aquaculture farmers, promote investment, and enhance food security. However, it faces challenges related to data, awareness, adverse selection, and administration.
2. The involvement of key stakeholders and the establishment of a governing structure are critical for its successful implementation and sustainability.
3. A governing structure is essential to ensure the successful implementation of the Aquaculture Crop Insurance scheme for shrimp and fish farming.

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