'Southeast Asia: Satellite data secures rice farmers' income'

Crop loss insurers use satellite data to determine extent of damage

Around 60 per cent of India's population works in agriculture, in spite of the serious income risks involved. Extreme weather conditions such as droughts and floods can threaten an entire harvest. Asia alone, where the majority of the world's rice is grown, has experienced nearly 3,000 natural disasters over the last twenty years, leading to substantial losses in excess of one billion US dollars.

The first crop insurance policies were introduced in India in 1972. Since then, they have been consistently expanded and adapted. A crop loss insurance policy introduced in 2016 by the Indian federal state of Tamil Nadu is the first to pilot the satellite technology pioneered by the 'RIICE' project.

RIICE collects data that tells which areas are cultivating rice at which point in time. It then calculates both the expected and the actual crop yield. These harvest forecasts factor in weather and soil data, rice varieties and cultivation methods and – following natural disasters such as a drought or flood – include information about dried out fields or rotten seeds. Insurance companies use these crop forecasts to be able to respond considerably more flexibly, transparently and quickly. This is important because for many farmers their entire livelihood depends on how quickly they get compensation. Before satellite data, they were not able to receive compensation until after the harvest and until the insurers had inspected the damage on site – a process that sometimes took months to complete. The forecasts based on satellite data make for much swifter compensation for farmers. ‘RIICE technology offers great potential in terms of increasing the efficiency of crop loss insurance for farmers,' explains M. K. Poddar from the Agricultural Insurance Company of India, the country's largest agricultural insurer.

With the help of satellite data, trained experts are able to calculate expected crop yields with – more or less – 90 per cent accuracy. If seed does not develop as anticipated because of drought, insurers can start compensating farmers for the forecasted loss long before the actual harvest. If a natural disaster prevents farmers from sowing their seed, the insurer in the federal state of Tamil Nadu can already pay out a quarter of the insured sum to the farmers right at the start of the season, enabling them to invest in seed for use at a later point in time, thus softening the blow to their income.

At present, around 35 million farmers in India are insured against crop losses.

Status: March 2017