Jan 172016

Ministers’ panel discusses new crop insurance scheme

In order to provide maximum coverage for crops to the farmers, a group of ministers proposed a new crop scheme with reduced premium percentage charges by 3 per cent.

At present, there are two such insurance schemes viz., NAIS and MNAIS. Currently, insurance companies charge premium between 1 to 20 percent of the total crop value. Whatever the total premium being charged by the insurance companies, around 3.5 per cent is paid towards NAIS and 8 percent is paid toward MNAIS, the rest is borne by the Government.

As per sources, a detailed discussion on Agriculture ministry’s proposal has been done, with an objective to provide coverage up to maximum possible level and bringing down the burden of paying a higher premium.

Agriculture Minister Radha Mohan Singh, Finance Minister Arun Jaitley, and Heavy Industries Minister Anant G Geete were honorable speakers in this meeting. To bring down the crops insurance premium almost 5 percent from the existing level and to bring this change as soon as possible were few of the main agendas of the meet.

Fixing different slabs of premium based on rain fed, irrigated and hilly areas were also focused. Apart from this, an emphasis was given to enforce proper implementation of well-structured mechanism, so that farmers has easy access to this facility. Moreover, idea for making insurance for every farmer for his crops would be compulsory, is also in the pipeline. To protect every farmer’s interest, this insurance scheme will soon be made compulsory everywhere in the country.

Other cabinet ministers have already put on their views on this subject, all the comments would be taken into consideration while declaring the Cabinet note.

Ministry recommended a leverage of premiums without any cap to the farmers of unprotected and disaster-prone areas unlike the existing scheme MNAIS, otherwise a minimum of 3 percent of premium should be paid by the farmers.

The capped premium of 13 percent area is kept in most in danger areas of Kharif crop and at the same time the capped premium is 11 per cent for Rabi crop.

The proposed scheme would be available for the bank who provides loan to small business or farmer and also for non-loanees. To avail crop loan from the financial institutions would be made mandatory the loanee farmers. In order to promote this scheme and to make it easily accessible, private insurance companies are also encouraged to offer this insurance policy to the farmers.

Ministry stated that this scheme would be rolled out from the ongoing rabi season commenced last month. Government data reveals, that only 20 percent, which is nearly about 40.27 million hectares of the total land is insured. Rajasthan has taken a lead for maximum land insured which is 12.26 million hectare, followed by Bihar, Karnataka, Maharashtra, Gujarat, Uttar Pradesh and Andhra Pradesh.

Awareness is being generated among the farmers about the benefits of insuring their land for farming at mass. Farmers have shown intent in this new insurance policy and eager to enroll themselves in the policy offered by many banks.

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