1. Agriculture Insurance in India – Challenges and way forward O RIGO C OMMODITIES I NDIA

2. A GRICULTURE INSURANCE – E XPERIENCE & S COPE P UBLIC P RIVATE P ARTNERSHIP O RIGO OVERVIEW

3. A GRICULTURE I NSURANCE IN I NDIA – E XPERIENCE & S COPE 3

4.  Huge geography with limited irrigated area  Unpredictable and erratic monsoon  Limitations in contingency crop planning  Almost 16% contribution to GDP  Total Food Grain Production is 265 MMT +  Total Post harvest losses close to 5- 6%  Lack of robust and integrated supply chains from farm to fork  Farmer realization as percent to consumer prices is only 35-40%  6 % of production goes into processing, as compared to 25-30% in developed countries  Cold storage requirement gap in India is 10 MMT  Estimated gap of scientific storage space (dry) around 35-40 MMT  Infrastructure support for value added services at farm gate – Negligible  Constraints in micro level weather forecast capabilities 4 The Facts – Indian Agriculture

5. 5  Agriculture in India is highly susceptible to risk of draught, flood etc  GOI introduced many insurance schemes to protect farmers from natural calamities and ensure there credit eligibility for next season  CCIS ( Comprehensive Crop Insurance Scheme)  Compensation equal to shortfall in yield ( guaranteed – actual)  Scrapped in 1997  Experimental Crop Insurance Scheme  Introduce in 1997-98, covering non loanee small and marginal farmers  Selected crops in specified districts  Premium subsidized  Premium collected Rs 3 Crs against claim amount of Rs 40 Crs  GOI discontinued it in 1997 – 98 itself  Agriculture Insurance in India

6. 6  National Agriculture Insurance Scheme ( NAIS) or Rashtriya Krishi Bima Yojna ( RKBY)  Introduced in 1999 – 2000, after failure of CCIS  Cover all food crops ( Cereal, Pulses), Oilseed, Horticulture and Commercial crops  Both loanee and non – loanee farmers  Premium rates vary from 1.5% to 3.5 % for food crops  50% subsidy for small and marginal farmers, equally by State and Central Govt  Scheme operates on the basis of  Area approach – defined areas for each notified crops for widespread calamities  On Individual basis - for localized calamities such as hailstorms, landslides, cyclones and floods Agriculture Insurance in India

7. 7  Farm Income Insurance Scheme ( FIIS) By Agriculture Insurance Company of India  Started 2003 -04  Loanee farmers for wheat and rice initially  Guaranteed income basis (Average yield multiplied by MSP)  Protection to farmers by insuring production and market risks  Withdrawn in 2004  Recent attempt by Govt of Gujarat to re introduce  Can reform Agriculture Insurance  Prevent farm level distress Agriculture Insurance in India

8. 8  Post harvest management solutions  Warehouse building insurance  Food grain stock insurance  Transit insurance  Quality insurance ?  Fidelity Insurance  Huge scope for innovation and comprehensive products Agriculture Insurance –Along the value chain Crop Production Crop Insurance Transportation & Logistics Transit Insurance Warehousing and Supply Chain Warehousing, Stock Insurance Commodity Quality ???...

9. 9 Stake holders along the value chain Crop Production Crop Insurance Transportation & Logistics Transit Insurance Warehousing and Supply Chain Warehousing, Stock Insurance Commodity Quality ???... Farmer Farmers/ Aggregators Farmers/ Traders/ Processor Farmer/ Processor Agriculture Production Aggregation/ Logistics Inventory & storage Processing & Consumption Agriculture Commodity supply chain continuum Stake holders along the value chain of Agro commodities Risks and Mitigants along the value chain Premium for risks to be apportioned at every value chain and stake holder to bear the same as a part of pricing. integrated insurance to make the commodities tradable at premium

10. Agriculture Insurance- The current challenges  Awareness at farm gate level is still in nascent stages  Agriculture insurance to be mandated by IRDA to Insurance companies (Similar way of policy of PSL for banks)  Limited insurance companies in the space  This space is with limited INNOVATION and needs more innovative products to be designed  Less synergies between Banks, Insurance companies and other stake holders in this space 10

11. A GRICULTURE I NSURANCE - P UBLIC P RIVATE P ARTNERSHIPS 11

12. Risks and Coverage Type of Risk;Classification of Risks Crop risks Weather (Drought, Floods, Fire & Inundation) Crop Yield Commodity and Warehouse related risks Stock Insurance (Fire, Burglary, STFI and Warehouse insurance) Transportation RisksTransit Insurance Quality Risks Weight loss Quality significance loss Fidelity (Commodities Related)Human related, On roll, outsourced and third party 12

13. Challenges for PPP  Farmers  Awareness of risk and impacts  Survey and assessment of loss - Accuracy and transparency  Standard production practices – Individual practices  Claim settlements  Perception of burden, not a value add  Investors  Return on investment  Historical data  Contractual obligation of farmers  Control and monitoring through life cycle 13

14. Opportunities for PPP  Product innovation – Inputs and/ or Labour, returns  Process standardization  Unit base survey, inspection and loss assessment  Seamless and transparent claim settlement  Weather research, crop research and advisories to be easily accessible to the farmers  Participation of farmer bodies - Awareness, implementation and improvisation happens at all stages  Holistic approach and group insurance concept rather than Individual farmers may reduce the premium and smoothen claim settlement.  Govt to formulate simple and transparent guidelines and monitoring systems  Govt to cross subsidies the Viability Gap for investors till the time products and process matures 14

15. Integrated approach  Integrated approach to cover the risks through value chain 15 Crop Insurance Produce Insurance Mandate Components Riders  STFI  Special perils Mandate Components Riders  Quality Risks  Transit risks  Price Risks  Terrorism  Riots & Earthquake Weather Rainfall & Drought Standard Fire & Burglary Covered till liquidation and realization of better returns for farmers

16.  Increases Accessibility to farmers  More innovative products to help cover more risks in agriculture  Value addition through smooth loss configuration and settlement  Access to wider and diversified risk mitigants  Create value along the supply chain and buyer incentivisation on risks coverage would be transferred to farmers  We together can save many lives of farmers 16 Impact on farmers

17. O RIGO O VERVIEW

18. Presence 15 States including Rajasthan, Madhya Pradesh, Delhi, Maharashtra, Andhra Pradesh, Karnataka, Gujarat, Uttar Pradesh, Bihar, West Bengal, Uttarakhand, and Punjab. Storage capacity~35,00,000 MT Asset Under ManagementRs. 8,500 crores + Number of Locations/ Warehouses200 +/ 300 + Government Projects / AssociationPUNGRAIN (Punjab State Grain Procurement Corporation Limited) NABARD (Promote NWR financing through Primary Agriculture Cooperative Societies) State Trading Corporation (STC) Cotton Corporation of India (CCI) PSWC ( Punjab State Warehousing Corporation) Collateral Management Agreement Punjab National Bank, Canara Bank, Central Bank of India, ICICI Bank, Axis Bank, IndusInd Bank, Ratnakar Bank, Reliance Commercial Finance, ABFL (Promoted by NABARD), Edelweiss Exchange Accreditations NCDEX Spot Exchange ACE Derivatives and Commodity Exchange ICEX (Indian Commodity Exchange) Associations / Membership Warehousing Regulation and Development Authority (WDRA) Indian Chamber of Commerce (ICC) Food Safety & Standard Authority of India (FSSAI) APEDA (Agricultural & Processed Food Products Export Development Authority) Fumigation & Pest ManagementPPQ Compliance Fumigation licenses Quality Laboratories 5 stationary labs and 200+ mobile labs kits Employee Strength 1,050+ F ACT F ILE

19. 19 Origo has a unique service basket offering customized end-to-end commodity management solutions fostering better utilization of resources. Each service is a part of supply chain as well as an independent service offering Reducing Cost & Wastage Reducing Pest Risk Reducing Market Adoption Risk Reducing Liquidity Risk Reducing Credit Risk Professional Warehousing Collateral Management Quality & Certification Preservation & Protection Trade Support Price Discovery for Farmers Procurement at Farm Gate ProcurementStorageFinancingMarket Linkage Sourcing of Business for Commodity Financing A C OMPLETE S OLUTIONS P ROVIDER

20.  In a short time Origo has been able to establish a footprint in most parts of the country having production or trade of commodities  Presence in 15 States including Rajasthan, Madhya Pradesh, Delhi, Maharashtra, Andhra Pradesh, Karnataka, Gujarat, Uttar Pradesh, Bihar, West Bengal, Tamil Nadu, Uttarakhand, Haryana, Chattisgarh and Punjab.  Footprint in states with major port locations  Execution capability of multi lines of business across the states P AN I NDIA P RESENCE

21. Corporate Commodity Exchanges Banking Associates / FIs (PUNGRAIN)` PSU S ELECT C LIENTS