New Delhi, April 16 -- A recent report by the India Meteorological Department (IMD) projecting a weak monsoon at around 92 per cent of normal rainfall has begun to push up crop insurance costs, raising fresh concerns among farmers ahead of the sowing season.
Insurers have moved quickly to reassess risks. Lower rainfall typically leads to reduced crop yields, which in turn results in higher insurance claims. As a result, premiums for vulnerable crops such as pulses, soybean and edible oils are being revised upwards. In central India, farmers insuring soybean may have to pay 15-20 per cent more this year.
On the ground, the impact is already visible. Rajesh Kumar, who operates an insurance counter in a village in Madhya Pradesh, said farmers are increasingly enquiring about coverage following the monsoon forecast. However, he has had to inform them that premiums are set to rise, adding to their financial burden.
"I keep telling them (farmers), just wait for May," Rajesh told Millennium Post. "But they're already panicking. And I can't blame them."
Warehouses are steadily filling up with pulses, edible oil and rice-not as a sign of hoarding, but as a calculated business move. With forecasts pointing to a weak monsoon, traders expect smaller harvests and tighter supplies, which typically push prices higher.
Seed companies and fertiliser dealers are also responding to the outlook. Many are promoting costlier "drought-resistant" seed varieties that can better withstand poor rainfall. While these may offer some protection against weather risks, they add to the financial strain on farmers already operating on thin margins.
Suresh, a farmer in Maharashtra, faced this dilemma while purchasing seeds in April. His dealer recommended a new, more expensive variety, claiming it was better suited for dry conditions. "He wasn't wrong," Suresh said, "but I can't afford to spend an extra Rs 2,000 right now."
Like him, many farmers are left with limited options. Some opt for cheaper seeds and rely on favourable weather, while others shift to short-duration crops that can mature quickly even with limited rainfall. These are often decisions driven by survival rather than optimal planning.
Regions expected to receive below-normal rainfall-such as parts of central India, Jharkhand and Bihar-could face crop losses and rising prices. The impact, however, is uneven. While a soybean farmer in Vidarbha may suffer losses, a rice grower in Assam could see a relatively stable season. Such disparities create supply imbalances.
"Regional shortages often translate into nationwide price pressures," an Agriculture department official said. "A weak monsoon in a key producing belt can affect food costs across India."
Market players say price movements often begin even before crops are harvested. "People assume prices rise after a poor harvest," said a Delhi-based pulse distributor. "In reality, markets react to forecasts. By the time the monsoon ends, prices may have already increased by 8-15 per cent."
Published by HT Digital Content Services with permission from Millennium Post.