CROP INSURANCE
Agriculture in India is highly susceptible to risks
like floods, drought and others. So it is necessary to protect the farmers
against natural calamities. Due to that, GoI introduced many schemes throughout
the country. Prof. V. M. Dandekar often referred as Father of Crop Revolution
in India.
“Crop
Insurance is the scheme purchased by agriculture producers to protect
themselves from heavy losses due to natural calamities and to stabilize the
farm business during the period of crop failure”.
General Objectives for Crop
Insurance:
These are the general objectives adopted by the
different crop insurance schemes.
1.
To
protect the farmers against loans suffered by them due to crop failure.
2.
To
fight against natural calamities such as drought, flood, cyclones, fire etc.
3.
To
provide the required credit to farmer for season.
Different Crop Insurance Scheme:
In October 1965 the Government of India decided to
introduce a Crop Insurance Bill and a Model Scheme of Crop Insurance in order
to enable the States to introduce crop insurance if they so desired. In 1970,
the draft Bill and the Model Scheme were referred to an Expert Committee headed
by Dr. Dharm Narain.
There after flow of schemes continues to till today.
These are enlisted below and their features are discussed in Table.
1.
First
Crop Insurance Scheme, 1972
2.
Pilot
Crop Insurance Scheme, 1979
3.
Comprehensive
Crop Insurance Scheme, 1985
4.
National
Agriculture Insurance Scheme (NAIS), 1999
5.
Agriculture
Insurance Company of India Limited (AIC), 2003
6. Pradhan
Mantri Fasal Bima Yojna (PMFBY), 2016
Table: Different Crop Insurance Scheme
|
No |
Scheme |
Est.
Year |
Objectives
or Coverage |
Features |
|
1. |
First
Crop Insurance Scheme |
1972
Gujarat |
Insurance
of cotton, wheat and potato |
It
is based on Individual Area Approach. Upto 1978-79 covered only 3110 farmers with
premium of Rs. 4.54 lakhs against claims of 37.88 lakh. So
not successful |
|
2. |
Pilot
Crop Insurance Scheme |
1979 |
The
scheme covered cereals, millets, oilseeds, cotton, potato, gram and barley. It
covers 13 states with 6.27 farmers. |
V.
M. Dandekar Suggests Homogenous Area Approach. GIC
& state government shared risk in the ratio of 2:1. The
scheme a Premium of Rs. 1.97 cr. against Claims of 1.57 crore |
|
3. |
Comprehensive
Crop Insurance Scheme (CCIS) |
1985 |
It
was implemented on Homogeneous Area approach and was linked to short-term
crop credit. It
covers 15 states and 2 Union Territories (UT). |
Premium
& Claims were shared by Central & State Government in 2:1 ratio. The
Scheme was optional to State Governments. Drawback
of the scheme out of total claims ₹16.23
billion, Gujarat
alone received ₹7.92 billion for one
single crop, groundnut.
It
is replace by NAIS. |
|
4 |
National
Agriculture Insurance Scheme (NAIS) |
1999 |
To
provide insurance covered and financial support to the farmers during
calamities, pests & diseases. To
encourage the farmers to use progressive farming practices and higher
technology in Agriculture. It
covers 25 states & 2 UT. |
Scheme
is available to all farmers irrespective to their holding size. It
covers all food crops such as cereals, pulses, oilseeds and others. Premium
rates vary from 1.5 to 3.5%. It
operates on the basis of area approach and no upper limit of insured amount. |
|
5. |
Agriculture
Insurance Company of India Limited (AIC) |
2003 |
To
provide financial security to persons engaged in agriculture and allied
activities. It
covers 500 districts with 20 million farmers. To
help in stabilizing farm incomes. Head
office is at New Delhi. |
It
includes Weather Based Crop Insurance Scheme (WBCIS). It
is under administrative control of Ministry of Finance, GoI. Initial
paid up capital was Rs. 200 Cr. and contributed by GIC (35%), NABARD (40%)
and 4 Public sector banks (35%: 8.75% each) Authorized
share capital was Rs. 1500 Cr. |
|
6.
|
Pradhan
Mantri Fasal Bima Yojna (PMFBY)
|
2016 |
To provide insurance coverage and financial
support to the farmers in the event of crop failure. |
The
scheme covers Kharif, rabi crops as well as annual commercial and
horticultural crops. In
addition to yield loss, it covers post harvest losses also. |
PRADHAN MANTRI FASAL
BIMA YOJNA (PMFBY)
In January 2016, NDA Government has launched a new crop
scheme called Pradhan Mantri Fasal Bima Yojna (PMFBY) or Prime
Minister’s Crop Insurance Scheme. It will replace NAIS and Modified NAIS.
The new scheme will come into force the Kharif season starting in June this
year. The theme of the scheme is ‘Minimum Premium, Maximum Insurance to
Farmers’.
The new
insurance scheme would cost the government Rs 8,800 crore over the next three
years, assuming that 50 per cent of farmers are covered. At present, with 23
per cent insurance cover, the Centre spends Rs 3,100 crore a year on crop
insurance. The insurance amount covered will also not be capped and so also the
premium rates.
Objectives:
1. To provide
insurance coverage and financial support to the farmers in the event of failure
of any of the notified crop as a result of natural calamities, pests &
diseases.
2. To
stabilize the income of farmers to ensure their continuance in farming.
3. To
encourage farmers to adopt innovative and modern agricultural practices.
4. To ensure
flow of credit to the agriculture sector.
Implementation Agency:
The Scheme shall be
implemented through a multi-agency framework by selected insurance companies
under the control of the
ü Department
of Agriculture,
ü Cooperation
& Farmers Welfare (DAC&FW),
ü Ministry
of Agriculture & Farmers Welfare (MoA&FW),
ü Government
of India (GOI) and
ü The
concerned State in co-ordination with various other agencies like Financial
Institutions (Commercial Banks, Co-operative Banks, RRB’s), Government
Departments (Agriculture, Co-operation, Horticulture, Statistics, Revenue,
Panchayati Raj etc.)
Crops Covered:
The scheme
covers Kharif, Rabi crops as well as annual commercial and horticultural crops.
For Kharif crops the premium charged would be up to 2% of sum insured and for Rabi
it is 1.5% of sum insured. For annual commercial and horticultural crops
premium will be 5%.
Insurance:
There would
be One insurance company for whole state. Private insurance companies join
hands with Agriculture Insurance Company of India Limited (AIC) to implement
this scheme.
Losses covered:
In addition to yield loss, it covers post harvest
losses also. It also provides farm level assistance against different
calamities.
At the same time Losses arising out of
following conditions shall be excluded. Certain examples are War & kindred
perils, nuclear risks, riots, malicious damage, theft, grazed and/or destroyed
by domestic and/or wild animals, In case of Post–Harvest losses the harvested
crop bundled and heaped at a place before threshing, other preventable risks.
Use of Technology:
Scheme
recommends mandatory use of remote sensing, smart phones for quick estimation
of losses suffered to process the claims further.
Other Features:
The scheme
aims to bring 50% farmers under purview of it within next 2 to 3 years. About
25% of the likely claims will be settled directly on farmers account. It
prescribes only one premium rates for each season for all foodgrains, oilseeds
and pulses etc.
Comparison with
earlier crop insurance scheme:
1.
It
is optional to loanee and non-loanee farmers and open to all farmers.
2.
It
set lowest premium so far in insurance scheme. (Premium rate is lower than the
NAIS).
3.
It
provides full coverage of insurance.
4.
Also
covers localized risks such as landslide, inundation etc. For first time
inundation has been included.
5.
Covers
post harvest coverage. NAIS did not cover it, while modified NAIS cover only
for coastal regions.
6.
Only
one premium rate per season.
7.
Use
of technology is mandatory in it.
Some of the General Insurance companies provide crop
insurance scheme are as follows.
1. Agriculture Insurance Company of
India Ltd.
2. IFFCO-Tokio General Insurance Co.
Ltd.
3. Tata AIG General Insurance Co. Ltd.
