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Integrating Remote Sensing Data in Crop Insurance: A Solution to Data Scarcity in India

  • Upelina Bina Murmu ORCID logo EMAIL logo and Dushyant Ashok Mahadik
Published/Copyright: March 17, 2025

Abstract

Consistent crop information is vital for the survival of the crop insurance sector, which relies on historical crop data, weather records, meteorological information, and farmers’ details. In India, fragmented, low-quality, and costly data have led to adverse claims ratios, forcing insurance companies to exit the market. This paper proposes an integrated framework that assimilates crop details, quality satellite data, and an actuarial model for crop yield estimation. We use kernel density estimation for risk assessment and emphasize the critical role of bandwidth calculation. Our research indicates that traditional heuristics for bandwidth selection can be misleading. A visualization of the fitted distribution with a frequency histogram can often provide tell-tale signs of an erroneous conclusion from the heuristics. We emphasize the role of the modeller’s judgment in determining the optimal bandwidth that is free from overfitting or over-smoothing. The framework bridges the gap between data and the insurer. The proposed model is of regulatory importance as it solves the issue of missing data and improves risk assessment, which will improve crop insurance market penetration and farmers’ participation and thereby promote stability in the crop insurance sector.


Corresponding author: Upelina Bina Murmu, School of Management, National Institute of Technology Rourkela, 769008, Rourkela, Sundergarh, India, E-mail:

Acknowledgments

The authors thank the Indian Space Research Organisation (YS/PD-IP/343) and the University Grants Commission for financial support. We accessed all the remote sensing inputs, such as LAI, via GEE product MOD15A2H V6.1. Bhuvan provides Land Use maps at 1:50000 scale through a Web Map Tile Service.

  1. Research ethics: Not applicable.

  2. Informed consent: Not applicable.

  3. Author contributions: All authors have accepted responsibility for the entire content of this manuscript and approved its submission.

  4. Use of Large Language Models, AI and Machine Learning Tools: The manuscript was reviewed for grammar and spelling using Grammarly.

  5. Conflict of interest: The authors state no conflict of interest.

  6. Research funding: The authors thank the Indian Space Research Organisation (YS/PD-IP/343) and the University Grants Commission for financial support.

  7. Data availability: Not applicable.

Annexure

(Tables 1 and 2)

Table 1:

AMISE comparison of four bandwidth selection methods for explanatory variables.

District Variable Method ISE AMISE
AMBALA lai Silverman 0.00217 0.00011
AMBALA lai CV 0.00000 0.00000
AMBALA lai Plug-in 0.00249 0.00012
AMBALA lai Bootstrap 0.00222 0.00011
AMBALA phvstlai Silverman 0.01575 0.00087
AMBALA phvstlai CV 0.00000 0.00000
AMBALA phvstlai Plug-in 0.01777 0.00099
AMBALA phvstlai Bootstrap 0.01615 0.00090
AMBALA T2 Silverman 0.00349 0.00017
AMBALA T2 CV 63.66198 3.18310
AMBALA T2 Plug-in 0.00396 0.00020
AMBALA T2 Bootstrap 0.00360 0.00018
BAGHPAT lai Silverman 0.00091 0.00005
BAGHPAT lai CV 0.00000 0.00000
BAGHPAT lai Plug-in 0.00113 0.00006
BAGHPAT lai Bootstrap 0.00094 0.00005
BAGHPAT phvstlai Silverman 0.00734 0.00049
BAGHPAT phvstlai CV 0.00000 0.00000
BAGHPAT phvstlai Plug-in 0.01131 0.00075
BAGHPAT phvstlai Bootstrap 0.00792 0.00053
BAGHPAT T2 Silverman 0.00299 0.00017
BAGHPAT T2 CV 48.51545 2.69530
BAGHPAT T2 Plug-in 0.00381 0.00021
BAGHPAT T2 Bootstrap 0.00313 0.00017
BHIWANI lai Silverman 0.00036 0.00002
BHIWANI lai CV 0.00000 0.00000
BHIWANI lai Plug-in 0.00041 0.00002
BHIWANI lai Bootstrap 0.00037 0.00002
BHIWANI phvstlai Silverman 0.05017 0.00279
BHIWANI phvstlai CV 148.85111 8.26951
BHIWANI phvstlai Plug-in 0.05564 0.00309
BHIWANI phvstlai Bootstrap 0.05182 0.00288
BHIWANI T2 Silverman 0.00225 0.00011
BHIWANI T2 CV 63.66198 3.18310
BHIWANI T2 Plug-in 0.00269 0.00013
BHIWANI T2 Bootstrap 0.00233 0.00012
BIJNOR lai Silverman 0.02483 0.00131
BIJNOR lai CV 21.88210 1.15169
BIJNOR lai Plug-in 0.02917 0.00154
BIJNOR lai Bootstrap 0.02558 0.00135
BIJNOR phvstlai Silverman 0.00462 0.00027
BIJNOR phvstlai CV 0.00000 0.00000
BIJNOR phvstlai Plug-in 0.00526 0.00031
BIJNOR phvstlai Bootstrap 0.00476 0.00028
BIJNOR T2 Silverman 0.00468 0.00025
BIJNOR T2 CV 107.47028 5.65633
BIJNOR T2 Plug-in 0.00664 0.00035
BIJNOR T2 Bootstrap 0.00486 0.00026
FARIDABAD lai Silverman 0.00090 0.00004
FARIDABAD lai CV 0.00000 0.00000
FARIDABAD lai Plug-in 0.00106 0.00005
FARIDABAD lai Bootstrap 0.00093 0.00005
FARIDABAD phvstlai Silverman 0.13049 0.00725
FARIDABAD phvstlai CV 58.48907 3.24939
FARIDABAD phvstlai Plug-in 0.29252 0.01625
FARIDABAD phvstlai Bootstrap 0.13841 0.00769
FARIDABAD T2 Silverman 0.00245 0.00012
FARIDABAD T2 CV 63.66198 3.18310
FARIDABAD T2 Plug-in 0.00273 0.00014
FARIDABAD T2 Bootstrap 0.00251 0.00013
FATEHBAD lai Silverman 0.00021 0.00001
FATEHBAD lai CV 0.00000 0.00000
FATEHBAD lai Plug-in 0.00027 0.00001
FATEHBAD lai Bootstrap 0.00022 0.00001
FATEHBAD phvstlai Silverman 0.10059 0.00559
FATEHBAD phvstlai CV 29.25794 1.62544
FATEHBAD phvstlai Plug-in 0.15226 0.00846
FATEHBAD phvstlai Bootstrap 0.10550 0.00586
FATEHBAD T2 Silverman 0.00268 0.00013
FATEHBAD T2 CV 83.55635 4.17782
FATEHBAD T2 Plug-in 0.00328 0.00016
FATEHBAD T2 Bootstrap 0.00279 0.00014
GHAZIABAD lai Silverman 0.00236 0.00012
GHAZIABAD lai CV 0.00000 0.00000
GHAZIABAD lai Plug-in 0.00269 0.00014
GHAZIABAD lai Bootstrap 0.00242 0.00013
GHAZIABAD phvstlai Silverman 0.00981 0.00058
GHAZIABAD phvstlai CV 49.68456 2.92262
GHAZIABAD phvstlai Plug-in 0.01075 0.00063
GHAZIABAD phvstlai Bootstrap 0.01000 0.00059
GHAZIABAD T2 Silverman 0.00199 0.00010
GHAZIABAD T2 CV 73.27519 3.85659
GHAZIABAD T2 Plug-in 0.00215 0.00011
GHAZIABAD T2 Bootstrap 0.00204 0.00011
HISAR lai Silverman 0.00063 0.00003
HISAR lai CV 35.45927 1.77296
HISAR lai Plug-in 0.00079 0.00004
HISAR lai Bootstrap 0.00066 0.00003
HISAR phvstlai Silverman 0.05386 0.00299
HISAR phvstlai CV 0.57158 0.03175
HISAR phvstlai Plug-in 0.09238 0.00513
HISAR phvstlai Bootstrap 0.05909 0.00328
HISAR T2 Silverman 0.00366 0.00018
HISAR T2 CV 63.66198 3.18310
HISAR T2 Plug-in 0.00620 0.00031
HISAR T2 Bootstrap 0.00383 0.00019
KAITHAL lai Silverman 0.00052 0.00003
KAITHAL lai CV 0.00000 0.00000
KAITHAL lai Plug-in 0.00065 0.00003
KAITHAL lai Bootstrap 0.00054 0.00003
KAITHAL phvstlai Silverman 0.02373 0.00132
KAITHAL phvstlai CV 0.00037 0.00002
KAITHAL phvstlai Plug-in 0.23771 0.01321
KAITHAL phvstlai Bootstrap 0.02618 0.00145
KAITHAL T2 Silverman 0.00227 0.00011
KAITHAL T2 CV 561.02117 28.05106
KAITHAL T2 Plug-in 0.00272 0.00014
KAITHAL T2 Bootstrap 0.00233 0.00012
KARNAL lai Silverman 0.00200 0.00010
KARNAL lai CV 18.21586 0.91079
KARNAL lai Plug-in 0.00283 0.00014
KARNAL lai Bootstrap 0.00207 0.00010
KARNAL phvstlai Silverman 0.03129 0.00174
KARNAL phvstlai CV 0.00000 0.00000
KARNAL phvstlai Plug-in 0.03558 0.00198
KARNAL phvstlai Bootstrap 0.03243 0.00180
KARNAL T2 Silverman 0.00199 0.00010
KARNAL T2 CV 63.66198 3.18310
KARNAL T2 Plug-in 0.00211 0.00011
KARNAL T2 Bootstrap 0.00201 0.00010
KURUKSHETRA lai Silverman 0.00220 0.00011
KURUKSHETRA lai CV 0.00000 0.00000
KURUKSHETRA lai Plug-in 0.00252 0.00013
KURUKSHETRA lai Bootstrap 0.00227 0.00011
KURUKSHETRA phvstlai Silverman 0.00990 0.00055
KURUKSHETRA phvstlai CV 7.11974 0.39554
KURUKSHETRA phvstlai Plug-in 0.01194 0.00066
KURUKSHETRA phvstlai Bootstrap 0.01025 0.00057
KURUKSHETRA T2 Silverman 0.00223 0.00011
KURUKSHETRA T2 CV 63.66198 3.18310
KURUKSHETRA T2 Plug-in 0.00247 0.00012
KURUKSHETRA T2 Bootstrap 0.00228 0.00011
MORADABAD lai Silverman 0.00169 0.00009
MORADABAD lai CV 0.00000 0.00000
MORADABAD lai Plug-in 0.00191 0.00010
MORADABAD lai Bootstrap 0.00173 0.00009
MORADABAD phvstlai Silverman 0.00541 0.00032
MORADABAD phvstlai CV 0.00000 0.00000
MORADABAD phvstlai Plug-in 0.00750 0.00044
MORADABAD phvstlai Bootstrap 0.00558 0.00033
MORADABAD T2 Silverman 0.00269 0.00014
MORADABAD T2 CV 246.69315 12.98385
MORADABAD T2 Plug-in 0.00311 0.00016
MORADABAD T2 Bootstrap 0.00277 0.00015
MUZZAFARNAGAR lai Silverman 0.00818 0.00043
MUZZAFARNAGAR lai CV 0.00000 0.00000
MUZZAFARNAGAR lai Plug-in 0.00921 0.00048
MUZZAFARNAGAR lai Bootstrap 0.00837 0.00044
MUZZAFARNAGAR phvstlai Silverman 0.00786 0.00046
MUZZAFARNAGAR phvstlai CV 0.23208 0.01365
MUZZAFARNAGAR phvstlai Plug-in 0.01155 0.00068
MUZZAFARNAGAR phvstlai Bootstrap 0.00821 0.00048
MUZZAFARNAGAR T2 Silverman 0.00295 0.00016
MUZZAFARNAGAR T2 CV 95.25775 5.01357
MUZZAFARNAGAR T2 Plug-in 0.00359 0.00019
MUZZAFARNAGAR T2 Bootstrap 0.00309 0.00016
PILIBHIT lai Silverman 0.00107 0.00006
PILIBHIT lai CV 0.00000 0.00000
PILIBHIT lai Plug-in 0.00122 0.00006
PILIBHIT lai Bootstrap 0.00109 0.00006
PILIBHIT phvstlai Silverman 0.00236 0.00014
PILIBHIT phvstlai CV 0.00000 0.00000
PILIBHIT phvstlai Plug-in 0.00276 0.00016
PILIBHIT phvstlai Bootstrap 0.00247 0.00015
PILIBHIT T2 Silverman 0.00415 0.00022
PILIBHIT T2 CV 95.25775 5.01357
PILIBHIT T2 Plug-in 0.00584 0.00031
PILIBHIT T2 Bootstrap 0.00427 0.00022
RAMPUR lai Silverman 0.00034 0.00002
RAMPUR lai CV 0.00000 0.00000
RAMPUR lai Plug-in 0.00047 0.00002
RAMPUR lai Bootstrap 0.00036 0.00002
RAMPUR phvstlai Silverman 0.00270 0.00016
RAMPUR phvstlai CV 0.00000 0.00000
RAMPUR phvstlai Plug-in 0.00327 0.00019
RAMPUR phvstlai Bootstrap 0.00279 0.00016
RAMPUR T2 Silverman 0.00252 0.00013
RAMPUR T2 CV 95.25775 5.01357
RAMPUR T2 Plug-in 0.00285 0.00015
RAMPUR T2 Bootstrap 0.00258 0.00014
SONIPAT lai Silverman 0.00029 0.00001
SONIPAT lai CV 0.00000 0.00000
SONIPAT lai Plug-in 0.00038 0.00002
SONIPAT lai Bootstrap 0.00031 0.00002
SONIPAT phvstlai Silverman 0.05701 0.00317
SONIPAT phvstlai CV 0.00000 0.00000
SONIPAT phvstlai Plug-in 0.13789 0.00766
SONIPAT phvstlai Bootstrap 0.06002 0.00333
SONIPAT T2 Silverman 0.00238 0.00012
SONIPAT T2 CV 218.83805 10.94190
SONIPAT T2 Plug-in 0.00264 0.00013
SONIPAT T2 Bootstrap 0.00243 0.00012
Table 2:

Bandwidth value under Silverman’s method.

District Variable Method Bandwidth
Ambala T2 Silverman 0.84
Ambala lai Silverman 1.17
Ambala phvstlai Silverman 0.41
Baghpat T2 Silverman 0.87
Baghpat lai Silverman 0.77
Baghpat phvstlai Silverman 0.68
Bhiwani T2 Silverman 0.78
Bhiwani lai Silverman 2.07
Bhiwani phvstlai Silverman 0.20
Bijnor T2 Silverman 0.85
Bijnor lai Silverman 0.33
Bijnor phvstlai Silverman 0.61
Faridabad T2 Silverman 0.79
Faridabad lai Silverman 1.44
Faridabad phvstlai Silverman 0.21
Fatehbad T2 Silverman 0.88
Fatehbad lai Silverman 2.64
Fatehbad phvstlai Silverman 0.20
Ghaziabad T2 Silverman 0.80
Ghaziabad lai Silverman 0.79
Ghaziabad phvstlai Silverman 0.56
Hisar T2 Silverman 0.98
Hisar lai Silverman 2.13
Hisar phvstlai Silverman 0.27
Kaithal T2 Silverman 0.82
Kaithal lai Silverman 2.05
Kaithal phvstlai Silverman 0.63
Karnal T2 Silverman 0.80
Karnal lai Silverman 1.26
Karnal phvstlai Silverman 0.27
Kurukshetra T2 Silverman 0.86
Kurukshetra lai Silverman 1.00
Kurukshetra phvstlai Silverman 0.54
Moradabad T2 Silverman 0.84
Moradabad lai Silverman 0.94
Moradabad phvstlai Silverman 0.60
Muzzafarnagar T2 Silverman 0.89
Muzzafarnagar lai Silverman 0.43
Muzzafarnagar phvstlai Silverman 0.55
Pilibhit T2 Silverman 0.86
Pilibhit lai Silverman 1.12
Pilibhit phvstlai Silverman 0.99
Rampur T2 Silverman 0.83
Rampur lai Silverman 1.53
Rampur phvstlai Silverman 0.65
Sonipat T2 Silverman 0.86
Sonipat lai Silverman 2.10
Sonipat phvstlai Silverman 0.30

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Received: 2023-12-06
Accepted: 2025-02-14
Published Online: 2025-03-17

© 2025 Walter de Gruyter GmbH, Berlin/Boston

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