The introduction of Agriculture 4.0 is bringing about a revolution in what was once considered one of the riskiest sectors for insurance because of its unpredictability and traditional ways of farming. Digital technology and Precision Agriculture are a few modern methodologies being employed to make agriculture more predictable, profitable, and sustainable. The ability to track, monitor, and manage every aspect of farming with agriculture technology now reduces the uncertainty and offers a protective cover to farmers around the world.
Rapid climate change accentuates the innate unpredictability associated with agriculture. Understandably, a vast majority of the farmers have limited access to quality crop insurance. This is where digital agriculture can make an impact. Powered with AI and Satellite-based intelligence on weather and cropping patterns that provides intelligence on ongoing and upcoming cultivation cycles, financial institutions find the right investment opportunities, and farmers get timely access to quality credit and services.
About 500 million smallholder farming households globally represent about 2.5 billion people who depend on agricultural production for their livelihoods. However, 90% of them have inadequate access to crop insurance, which makes them susceptible to colossal losses in the event of flood, drought, or other devastating weather extremities. Precision agriculture allows real-time monitoring of all agricultural plots across geographies and provides a prism into the future. This gives farmers the safety net they need against uncertainty and allows insurance providers to take calculated risks while offering credit facilities and services.
Leverage regional and district-level ground and satellite data to understand what grows where and map crop regions to insurance products that are most suitable to them. Understanding the growth and yield potential by region helps you modify and innovate existing products, so your decisions are based on actual performance data.
With a digital footprint that records every contributory element to agriculture, precision agriculture increases the predictability of agriculture for food growers and insurance providers. At every stage of farming, it allows both parties to track and monitor progress without relying on a physical presence on the field. Everything from data on the seeds sown, crop acreage, and yield estimation to water stress maps by region is available for informed decision making.
The biggest impact of precision agriculture is that it has opened up investment opportunities in a sector that was previously uninsurable. Precision agriculture provides insurance providers with a clear understanding of the risks associated with every financial decision and showcases its hidden potential. With complete transparency about every piece of cultivated land, both before and after cultivation, it helps insurers offer credit without worrying about potential losses.
Agriculture is an essential sector, but the risk of unpredictable weather conditions and unstable markets make the sector unattractive for both insurance providers and farmers. However, the infusion of advanced technologies can transform the entire landscape for the better and make it not just profitable but sustainable for all parties involved.
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