NABARD to Introduce Weather Insurance for Dairy, Fish, and Shrimp Farmers

Key Highlights:

• NABARD and AICIL to launch weather-based insurance for dairy, fish, and shrimp farmers.

• The temperature and Humidity Index (THI) is to be used for milk production insurance.

• “Khet Score” AI tool to assess farm conditions and creditworthiness.

• Insurance coverage to extend to Farmer-Producer Organizations (FPOs).

• The initiative aims to restore farmer confidence amid declining insurance participation.

Farmers are familiar with weather-based insurance for crops, but soon, similar insurance could be available for dairy, fish, and shrimp farming as well. The National Bank for Agriculture and Rural Development (NABARD), in collaboration with the Agriculture Insurance Company of India Limited (AICIL), is working on a new plan to provide weather insurance cover for the animal husbandry and fisheries sectors. This move aims to protect the income of livestock and fish farmers affected by changing weather conditions.

Temperature-Based Insurance for Dairy Farmers

The new insurance plan will be based on the Temperature and Humidity Index (THI). Extreme heat and humidity often reduce milk production in dairy animals. To protect farmers from such income losses, NABARD’s proposed insurance will compensate for reduced milk output during adverse weather conditions.

This initiative could bring much-needed relief to dairy farmers, especially during the summer months when milk production usually drops due to heat stress.

Insurance for Fisheries and Shrimp Farming

According to a report in the Financial Express, NABARD also plans to extend insurance coverage to fish and shrimp farmers. At present, very few insurance schemes exist for these sectors, leaving farmers vulnerable to financial losses caused by weather changes, diseases, and market fluctuations.

Additionally, increased tariffs from the United States have affected shrimp exports, worsening the situation for shrimp farmers. Introducing insurance coverage will help these farmers manage risks and continue operations more confidently.

NABARD’s “Khet Score” – An AI-Based Credit Scoring Tool

NABARD is also preparing to launch a new AI-based system called “Khet Score”. This tool will help in assessing farm conditions, productivity levels, and potential risks. Based on this data, it will create a credit score for farmers, making it easier to access loans and insurance products.

Moreover, NABARD plans to launch a special insurance scheme for Farmer-Producer Organizations (FPOs) to strengthen their financial stability and encourage group-based farming initiatives.

Declining Farmer Confidence in Insurance Schemes

Data shows that farmers participation in crop insurance schemes has been decreasing over the years. During the Kharif season:

• 21.85 lakh applications were received in 2023

• 16.99 lakh applications in 2024

• 11.15 lakh applications in 2025

Similarly, the insured area has also declined from 11.13 lakh hectares in 2023 to 5.99 lakh hectares in 2025.

This drop reflects a loss of trust among farmers towards existing insurance schemes, possibly due to delayed claim settlements or lack of awareness.

A Step Toward Regaining Farmer Trust

By expanding weather-based insurance beyond crops to include livestock, fisheries, and shrimp farming, NABARD aims to rebuild farmers confidence. These sectors are equally vulnerable to seasonal and climatic changes. Providing them with insurance support can help stabilize income, reduce risks, and promote sustainable agricultural growth in India.
Also Read: Chhattisgarh Government Announces Paddy Procurement from November 15

CMV360 Says

NABARD’s new weather insurance initiative marks a big step towards protecting farmers beyond traditional crops. By covering dairy, fish, and shrimp farming, it ensures more sectors are shielded from climate-related income losses. Combined with the AI-driven “Khet Score” and FPO insurance plans, NABARD’s efforts could rebuild farmers’ trust in insurance schemes and promote a more secure and sustainable future for India’s agriculture sector.