Agri Insurance

New Crop Insurance Scheme Discussed by Ministers Panel.

A group of ministers headed by Home Minister Rajnath Singh discussed proposed new crop insurance scheme that aims to bring down premium charges up to 3% and provide maximum coverage for crops to farmers.

Insurance companies on an average are charging premium in the range of 1-20 percent of the value of crops, under the existing crop insurance schemes NAIS and MNAIS. Of the total premium fixed by insurers, farmers are paying a premium of up to 3.5 percent and 8 percent for NAIS and MNAIS, respectively, and the rest is borne by government.

Sources said, "A group of ministers (GoM) discussed in detail the Agriculture Ministry's proposal on new crop insurance scheme. The proposal is to ensure farmers pay minimum premium and get maximum coverage."

The GoM deliberated on bringing down the crop insurance premium to below five percent from the existing levels as well as on insurance payment to farmers in the shortest possible time. The panel also discussed about fixing premium based on rainfed, irrigated and hilly areas, and also emphasised on the need to put in place a proper implementation mechanism to ensure crop insurance is made compulsory for all so that farmers' interest is protected.

The Ministry has proposed the benefit of farmers in vulnerable and disaster-prone areas, the ministry has recommended premiums without any cap unlike the existing scheme MNAIS and a premium of 3% required to be paid by farmers. And for Under the Modified National Agricultural Insurance Scheme (MNAIS), premiums are capped at 13% in most vulnerable areas for kharif crops and at 11% for rabi crops. The proposed scheme will be available to both loanees and non-loanees. It would be compulsory for loanee farmers to avail crop loan from financial institutions. Even private insurers would be allowed to offer the scheme.

The ministry is aiming to roll out the scheme in the ongoing rabi season that started last month, according to sources. As per government data, about 20 percent (40.27 million hectare) of the total farmland is insured under the existing schemes.

Maximum area insured in Rajasthan was at 12.26 million hectare, followed by Bihar, Karnataka, Maharashtra, Gujarat, Uttar Pradesh and Andhra Pradesh.