Crop insurance is an insurance arrangement aiming at mitigating the financiallosses suffered by the farmers due to damage and destruction of their crops as a result of various production risks. The vast majorities of India's about116 million farms cultivates rainfed crops and are particularly vulnerable to the vagaries of the Indian monsoon. In this context, agricultural risk management products, particularly for the small and marginal farmers, are of critical importance. In order to address some of the shortcomings and improve the scope and contents of Compre hensive Insurance Scheme replacing the Comprehensive Crop Insurance Scheme (CCIS) which was in operation in the country since1985.Government of India expre ssed its intentions to launch a new crop insurance scheme during 1998-99 budget speech. A broad-based National Agricultural Insurance Scheme (NAIS) or Rashtriya Krishi Bima Yojana (RKBY) was introduced with effect from the Rabi season of 1999-2000. Thes cheme was designed to cover all the farmers irrespective of the size of holding and both borrowers and non-borrowers. NAIS provides for greater coverage of crops and sum insured when compared with Comprehensive Insurance Scheme. The new crop insurance scheme was intended to address the issue of financial viability by raising the premium to 4 per cent for food crops and still higher premium for cash crops like sugarcane, potato, groundnut, etc. The government also set-up a separate subsidiary company, Agriculture Insurance Compa ny of India Ltd., under GIC to operate the sche me and give it freedom to alter or modify insurance charges to make the venture internally viable.
Objectives of National Agricultural Insurance Scheme (NAIS):
i. 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, Natural Fire and Lightening, Storm, Hailstorm, Cyclone, Typh oon, Tempest, Hurricane, Tornado Flood, Inundation and Landslide, Drought, Dry spells,pests & diseases so as to restore their credit worthiness for ensuing season.
ii. To encourage the farmers to adopt progressive farming practices, high value in-puts and higher technology in Agriculture.
iii. To help stabilize farm incomes, particularly in disaster years.
i. 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, Natural Fire and Lightening, Storm, Hailstorm, Cyclone, Typh oon, Tempest, Hurricane, Tornado Flood, Inundation and Landslide, Drought, Dry spells,pests & diseases so as to restore their credit worthiness for ensuing season.
ii. To encourage the farmers to adopt progressive farming practices, high value in-puts and higher technology in Agriculture.
iii. To help stabilize farm incomes, particularly in disaster years.
States participating in the scheme:
National Agricultural InsuranceScheme is being implemented in 23 States and UTs
National Agricultural InsuranceScheme is being implemented in 23 States and UTs
Crops covered under the scheme:
i. Food Crops (Cereals, Millets & Pulses): Paddy,Wheat, Jowar, Bajra, Maize, Ragi, Green gram, Horse gram
ii. Oilseeds: Groundnuet,Sunflower,Soya bean, Castor, Sesamum
iii. Annual Commercial/ Annual Horti cultural crops: Potato,Onion, Ginger, Turme ric,Banana, Pineapple, Jute, Tapioca, Cumin, Coriander, Methi etc.
The crops are selected for insurance if the past yield data for 10 years are available, and the State Govt agrees to conduct requisite number of Crop Cutting Experiments (CCEs) during the proposed season. At present there are 35 different crops during Kharif and 30 different Rabi season are being insured under National Agricultural Insurance Scheme in the country.
i. Food Crops (Cereals, Millets & Pulses): Paddy,Wheat, Jowar, Bajra, Maize, Ragi, Green gram, Horse gram
ii. Oilseeds: Groundnuet,Sunflower,Soya bean, Castor, Sesamum
iii. Annual Commercial/ Annual Horti cultural crops: Potato,Onion, Ginger, Turme ric,Banana, Pineapple, Jute, Tapioca, Cumin, Coriander, Methi etc.
The crops are selected for insurance if the past yield data for 10 years are available, and the State Govt agrees to conduct requisite number of Crop Cutting Experiments (CCEs) during the proposed season. At present there are 35 different crops during Kharif and 30 different Rabi season are being insured under National Agricultural Insurance Scheme in the country.
Who is eligible to be covered under the scheme?
Ans: All farmers growing insurable crops and availing Seasonal Agricultural Operat ions (SAO) loans from Banks / PACS are compulsorily covered under the Scheme by the Banks/ PACS, whereas the non-borrowing farmers growing insurable crops can also avail the benefit of the Scheme by submitting prescribed proposal forms at the nearest Banks/ PACS.
Claims: The claims are released to banks and the banks in turn credit the amount in the account of the beneficiary farmers and display the particulars of beneficiaries on their notice board.
Ans: All farmers growing insurable crops and availing Seasonal Agricultural Operat ions (SAO) loans from Banks / PACS are compulsorily covered under the Scheme by the Banks/ PACS, whereas the non-borrowing farmers growing insurable crops can also avail the benefit of the Scheme by submitting prescribed proposal forms at the nearest Banks/ PACS.
Claims: The claims are released to banks and the banks in turn credit the amount in the account of the beneficiary farmers and display the particulars of beneficiaries on their notice board.
How Indemnity claims are worked out?
Ans: It is as per the following formula:
Shortfall in yield------- X Sum Insured for the farmer Threshold Yield
(Shortfall = Threshold Yield - Actual Yield for the Defined Area).
The scheme is optional for States/UTs. Since inception of the Pilot, 33.26 lakh farmers have been covered over an area of 36.27 lakh hectares insuring a sum amounting to Rs.8063.73 crore. The claims amounting to about Rs. 234.27 crores have become payable against the premium of about 824.38 crore benefiting about 2.29 lakh farmers (uptoKharif 2012 season).
Ans: It is as per the following formula:
Shortfall in yield------- X Sum Insured for the farmer Threshold Yield
(Shortfall = Threshold Yield - Actual Yield for the Defined Area).
The scheme is optional for States/UTs. Since inception of the Pilot, 33.26 lakh farmers have been covered over an area of 36.27 lakh hectares insuring a sum amounting to Rs.8063.73 crore. The claims amounting to about Rs. 234.27 crores have become payable against the premium of about 824.38 crore benefiting about 2.29 lakh farmers (uptoKharif 2012 season).
What are the benefits expected from the Scheme?
Ans : This Scheme is expected to
1. Be a critical instrument of development in the field of crop production,providing financial support to the farmers in the event of crop failure.
2. Encourage farmers to adopt progressive farming practices and higher technology in Agriculture.
3. Help in maintaining flow of agricultural credit.
4. Provides significant benefits not merely to the insured farmers, but, to theentire community directly and indirectly through spillover and multiplier effects in terms of maintaining production & employment.
5. Streamline loss assessment procedures and help in building up huge andaccurate statistical base for crop production.
Ans : This Scheme is expected to
1. Be a critical instrument of development in the field of crop production,providing financial support to the farmers in the event of crop failure.
2. Encourage farmers to adopt progressive farming practices and higher technology in Agriculture.
3. Help in maintaining flow of agricultural credit.
4. Provides significant benefits not merely to the insured farmers, but, to theentire community directly and indirectly through spillover and multiplier effects in terms of maintaining production & employment.
5. Streamline loss assessment procedures and help in building up huge andaccurate statistical base for crop production.
What is the Unit of Insurance?
Ans : The scheme operates on the basis of Area Approach i.e. defined areas for each notified crop for widespread calamities and individual assessment is done on experimental basis for localised calamities, such as, hailstorm, landslide, cyclone and flood in certain pre-notified areas. The size of unit area varies from State to State and crop to crop. Presently, the defined area is Block/ Mandal/ Taluka/ Patwarihalka/ Nyayapa nchayat/ Gram anchayat/ Village, etc.
Ans : The scheme operates on the basis of Area Approach i.e. defined areas for each notified crop for widespread calamities and individual assessment is done on experimental basis for localised calamities, such as, hailstorm, landslide, cyclone and flood in certain pre-notified areas. The size of unit area varies from State to State and crop to crop. Presently, the defined area is Block/ Mandal/ Taluka/ Patwarihalka/ Nyayapa nchayat/ Gram anchayat/ Village, etc.
What' s amount of sum insured under NAIS?
Ans : A. For loanee farmers:-
i. Compulsory coverage: The amount of crop loan availed for the notified crop is the minimum amount of sum insured covered on compulsory basis.
ii. Optional Coverage: If the loanee-farmer so wishes he may insured his crop for a higher Sum Insured i.e, upto the value of Threshold Yield (i.e., guaranteed yield) which is called normal coverge even go for addtional coverage upto 150% value of average yield in the notified area. However, for additional coverage, the farmer has to pay premium at actuarial rate as notified by the State Government. The value of Sum Insured in such cases is arrived at by multiplying the threshold yield/ average yield with the latest available Minimum Support Price (MSP) announced by the Govt. or the market price provided by the State Govt. in case the MSP is not announced.
B. For Non-loanee farmers: Coverage at normal rates of premium is available upto the value of ThresholdYield . Additional coverage upto 150% of the value of Actual Yield can be obtained by payment of premium at actuarial rates. Note : It may however be noted that in case of annual commercial and horticultural crops, only actuarial rates of premium are charged at all the slabs of sum insured.
Ans : A. For loanee farmers:-
i. Compulsory coverage: The amount of crop loan availed for the notified crop is the minimum amount of sum insured covered on compulsory basis.
ii. Optional Coverage: If the loanee-farmer so wishes he may insured his crop for a higher Sum Insured i.e, upto the value of Threshold Yield (i.e., guaranteed yield) which is called normal coverge even go for addtional coverage upto 150% value of average yield in the notified area. However, for additional coverage, the farmer has to pay premium at actuarial rate as notified by the State Government. The value of Sum Insured in such cases is arrived at by multiplying the threshold yield/ average yield with the latest available Minimum Support Price (MSP) announced by the Govt. or the market price provided by the State Govt. in case the MSP is not announced.
B. For Non-loanee farmers: Coverage at normal rates of premium is available upto the value of ThresholdYield . Additional coverage upto 150% of the value of Actual Yield can be obtained by payment of premium at actuarial rates. Note : It may however be noted that in case of annual commercial and horticultural crops, only actuarial rates of premium are charged at all the slabs of sum insured.
How much premium a farmer has to pay to get the insurance cover?
Ans : A. For Kharif crops: Premium is 3.5 % of Sum insured for all Oilseed crops andBajra and 2.5% for all others foodcrops including pulses
B. For Rabi crops: Premium rates are 1.5% for wheat and 2% for all other foodcrops including pulses and oilseeds.
However, of the above flat rates and the actuarial rate whichever is lower shall apply.
C. For Annual Commercial and Horticultural crops:Atuarial premium rates are charged.
D. The premium for Small & Marginal farmers is subsidised to the extent of 10% which is shared by the State Govt. and Govt. of India.
Ans : A. For Kharif crops: Premium is 3.5 % of Sum insured for all Oilseed crops andBajra and 2.5% for all others foodcrops including pulses
B. For Rabi crops: Premium rates are 1.5% for wheat and 2% for all other foodcrops including pulses and oilseeds.
However, of the above flat rates and the actuarial rate whichever is lower shall apply.
C. For Annual Commercial and Horticultural crops:Atuarial premium rates are charged.
D. The premium for Small & Marginal farmers is subsidised to the extent of 10% which is shared by the State Govt. and Govt. of India.
Does a non-loanee farmer need to produce some documents for obtaining insurance cover?
Ans : The non-loanee farmer has to produce a proof (copy of land pass book / 7/12
extract / land revenue receipt etc.) to prove that he / she is the owner of theland. In case of sharecroppers and tenant farmers (who are not availing crop loan), a proof showing crop sharing / tenancy arrangement need to be produced.
Ans : The non-loanee farmer has to produce a proof (copy of land pass book / 7/12
extract / land revenue receipt etc.) to prove that he / she is the owner of theland. In case of sharecroppers and tenant farmers (who are not availing crop loan), a proof showing crop sharing / tenancy arrangement need to be produced.
How can a farmer get insurance coverage?
Ans: All loanee farmers automatically and get compulsorily covered under this Insu rance Scheme through the PACS/Bank branches, as and when crop loans for insured crops are disbursed to them. All non-loanee farmers desirous of availing insurance coverage should contact nearest Bank Branches before the stipulated time frame with a proposal for insurance. Non-loanee farmer should have a Bank A/c with the bank and pay the requisite premium to get insurance coverage.
Ans: All loanee farmers automatically and get compulsorily covered under this Insu rance Scheme through the PACS/Bank branches, as and when crop loans for insured crops are disbursed to them. All non-loanee farmers desirous of availing insurance coverage should contact nearest Bank Branches before the stipulated time frame with a proposal for insurance. Non-loanee farmer should have a Bank A/c with the bank and pay the requisite premium to get insurance coverage.
Are crop loans disbursed through Kisan Credit Cards (KCCs) eligible for insurance coverage under the NAIS?
Ans: Crop loans disbursed/withdrawn through KCCs are also eligible for coverage as per the terms and conditions applicable to the regular crop loans.
When and how, the claims are settled under NAIS?
Ans: In case of widespread calamities leading to damage and loss of crops, claims are settled on area approach basis. Any insured crop in a notified area recording lower actual yield than the guaranteed yield as per the crop estimation surveys conducted by the state govt., shall automatically become eligible for compensation/ claim. The shortfall in yield is determined for each crop and is the difference between the guaranteed yield and the current season's actual yield. Shortfall % is determined by expressing the shortfall as a proportion of guaranteed Yield. Claim is then computed by multiplying the sum insured with the shortfall %. Therefore no claims would be admissible/payable in case the current season's actual yield is more than the threshold yield. Applicable amounts of claims so arrived at are routed to the farmers through the banks in case of those farmers who are covered through the banks.Even in case of non-loanee farmers who approach Agriculture Insurance Company directly for insurance coverage, the claim amounts are paid by way of cheques or throughdesignated bank branches such that claim amounts get credited to their accounts. The claim assessment and payment would be done after receipt of the requisite yield data from the concerned agencies. The methodology of claim assessment based on individual appro ach shall be intimated to all concerned upon finalising the areas and modalities.
Ans: Crop loans disbursed/withdrawn through KCCs are also eligible for coverage as per the terms and conditions applicable to the regular crop loans.
When and how, the claims are settled under NAIS?
Ans: In case of widespread calamities leading to damage and loss of crops, claims are settled on area approach basis. Any insured crop in a notified area recording lower actual yield than the guaranteed yield as per the crop estimation surveys conducted by the state govt., shall automatically become eligible for compensation/ claim. The shortfall in yield is determined for each crop and is the difference between the guaranteed yield and the current season's actual yield. Shortfall % is determined by expressing the shortfall as a proportion of guaranteed Yield. Claim is then computed by multiplying the sum insured with the shortfall %. Therefore no claims would be admissible/payable in case the current season's actual yield is more than the threshold yield. Applicable amounts of claims so arrived at are routed to the farmers through the banks in case of those farmers who are covered through the banks.Even in case of non-loanee farmers who approach Agriculture Insurance Company directly for insurance coverage, the claim amounts are paid by way of cheques or throughdesignated bank branches such that claim amounts get credited to their accounts. The claim assessment and payment would be done after receipt of the requisite yield data from the concerned agencies. The methodology of claim assessment based on individual appro ach shall be intimated to all concerned upon finalising the areas and modalities.
Whether insured farmers whose crops are damaged need to intimate crop losses to bank to be eligible for claim?
Ans: In case of "Area approach", the farmers need not intimate crop losses toBank. The crop losses if any or reduction in yield as compared to Guaranteed yield shall be reflected in Crop Estimation surveys and the shortfall in yield, if any shall be paid as claim through the Bank. In case of areas notified for experimentation of individual loss assessment, the farmer need to intimate the crop loss within 48 hours with the local revenue/ agriculture dept.
Ans: In case of "Area approach", the farmers need not intimate crop losses toBank. The crop losses if any or reduction in yield as compared to Guaranteed yield shall be reflected in Crop Estimation surveys and the shortfall in yield, if any shall be paid as claim through the Bank. In case of areas notified for experimentation of individual loss assessment, the farmer need to intimate the crop loss within 48 hours with the local revenue/ agriculture dept.
What are the essential requirements before a farmer becomes eligible for claim under the Scheme?
Ans: The essential requirements are:
i) The farmer should have availed a crop loan for the insured crop. In case of non-loanee farmer, he should have submitted a proposal for insurance with requisite premium.
ii)The proposal/crop insurance Declaration with accurate and complete particulars should have been sent by the Bank along with requisite premium. iii) The State Govt. conducts requisite number of Crop Cutting Experiments for the insured crop in the insurance unit and submits the yield data within the prescribed date. iv) The yield data so submitted by the State Govt. shows short fall as compared to the Guaranteed yield.
Modified National Agricultural Insurance Scheme(MNAIS):
To improve further and make the scheme easier & more farmer friendly, a Joint Group was constituted by Government of India to study the existing crop insurance schemes. Based on the recommendations of the Joint Group and view/comments of various stakeholders, aproposal on Modified National Agricultural Insurance Scheme (MNAIS) was prepared was approved for implementation on pilot basis in 50 districts during the remaining period of 11th Plan from Rabi 2010-11. The salient improvements made in MNAIS (over NAIS) are as under:
a) Actuarial premium with subsidy in premium ranging upto 75% to all farmers;
b) Only upfront premium subsidy is shared by the Central and State Government on 50:50 basis and all claims liability is on the insurance Company.
c) Unit area of insurance reduced to village/ village panchayat level for major crops.
d) Indemnity for prevented sowing/planting risk and for post-harvest losses due to cyclone (coastal areas); e) On account payment up to 25% of likely claims as immediate relief to farmers; f) Uniform seasonality discipline for loanee and non-loanee farmers;
g) More proficient basis for calculation of threshold yield; and minimum indemnity level increased to 70% instead of earlier 60%; h)The scheme is compulsory for loanee farmers and voluntary for non-loanee farmers; i) Participation of private sector insurers for creation of competitive environment
for crop insurance. j) Setting up a catastrophic fund at the national level contributed by the central and the state government on 50:50 basis to provide protection to the insurance companies in the event of premium to claim ratio exceeds 1:5 at national level and failure to procure appropriate reinsurance cover at competitive rates;
k) National Agricultural Insurance Scheme is withdrawn from those area(s)/crop(s) where MNAIS is implemented.
- See more at: http://education.abn-andhrajyothy.com/crop-insurancebank#sthash.rpAANZQU.dpufAns: The essential requirements are:
i) The farmer should have availed a crop loan for the insured crop. In case of non-loanee farmer, he should have submitted a proposal for insurance with requisite premium.
ii)The proposal/crop insurance Declaration with accurate and complete particulars should have been sent by the Bank along with requisite premium. iii) The State Govt. conducts requisite number of Crop Cutting Experiments for the insured crop in the insurance unit and submits the yield data within the prescribed date. iv) The yield data so submitted by the State Govt. shows short fall as compared to the Guaranteed yield.
Modified National Agricultural Insurance Scheme(MNAIS):
To improve further and make the scheme easier & more farmer friendly, a Joint Group was constituted by Government of India to study the existing crop insurance schemes. Based on the recommendations of the Joint Group and view/comments of various stakeholders, aproposal on Modified National Agricultural Insurance Scheme (MNAIS) was prepared was approved for implementation on pilot basis in 50 districts during the remaining period of 11th Plan from Rabi 2010-11. The salient improvements made in MNAIS (over NAIS) are as under:
a) Actuarial premium with subsidy in premium ranging upto 75% to all farmers;
b) Only upfront premium subsidy is shared by the Central and State Government on 50:50 basis and all claims liability is on the insurance Company.
c) Unit area of insurance reduced to village/ village panchayat level for major crops.
d) Indemnity for prevented sowing/planting risk and for post-harvest losses due to cyclone (coastal areas); e) On account payment up to 25% of likely claims as immediate relief to farmers; f) Uniform seasonality discipline for loanee and non-loanee farmers;
g) More proficient basis for calculation of threshold yield; and minimum indemnity level increased to 70% instead of earlier 60%; h)The scheme is compulsory for loanee farmers and voluntary for non-loanee farmers; i) Participation of private sector insurers for creation of competitive environment
for crop insurance. j) Setting up a catastrophic fund at the national level contributed by the central and the state government on 50:50 basis to provide protection to the insurance companies in the event of premium to claim ratio exceeds 1:5 at national level and failure to procure appropriate reinsurance cover at competitive rates;
k) National Agricultural Insurance Scheme is withdrawn from those area(s)/crop(s) where MNAIS is implemented.
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