Crop insurance schemes have divided India into two parts viz. the states with under-penetration and the states with high penetration. While elucidating the reasons for this divide, critically examine its implications.

Despite of having so many schemes, only a fraction of farmers are covered under Crop insurance in India. There is a divide among states-under penetrated and highly penetrated.
The main reason for under-penetration is due to less awareness about insurance schemes. They are not aware of how the scheme works and when the premium should be paid. Small farmers do not show interest as they have to pay the premium. They request banks to waive off the premium; and banks under pressure to meet their crop loan targets, they waive off premium component. Alsoin states like Punjab and Haryana most parts are covered under assured irrigation facilities that protect farmers from conventional weather risks. Only famers availing bank loans are forced to get an insurance cover.
Whereas in High insurance Coverage States, they havean early history of cooperative banks and other institutions which were able to implement the crop insurance schemes faster. At the same time, these states also have to regularly deal with droughts, cyclones and other risks to farming. However, these states are suffering from high-level crop insurance frauds. Some examples are-Gujarat (Saurashtra), Maharashtra (Aurangabad and Jalgaon), Karnataka (Dharwad and Haveri), Andhra Pradesh (Rayalaseema), Telangana (Mahbubnagar), and Tamil Nadu (Nagapattinam and Sivaganga) with high level of insurance fraud.
Strong “local networks” of farmers, agriculture department officials and bank officials have misusedthe crop insurance schemes.