What are the different agricultural insurance strategies?

Ans.

Comprehensive Crop Insurance Scheme (CCIS) 1985-99
This scheme was linked to short term credit and implemented based on the „homogenous area approach?. Till Kharif 1999, the scheme was adopted in 15 states and 2 UT?s. Both PCIS and CCIS were confined only to farmers who borrowed seasonal agricultural loans from financial institutions. The main distinguishing feature of the two schemes was that PCIS was on a voluntary basis whereas CCIS was compulsory for loanee farmers in the participating states/UTs. Main
Features of the Scheme were:
1. It covered farmers availing crop loans from Financial Institutions, for growing food crops and oilseeds, on a compulsory basis. The coverage was restricted to 100 percent of the crop loan subject to a maximum of Rs.10,000/- per farmer.
2. The premium rates were 2 percent for cereals and millets and 1 percent for pulses and oilseeds. Farmers'? share of premium was collected at the time of disbursement of the loan. Half of the premium payable by small and marginal farmers was subsidized equally by the Central and State Governments.( Tripathi, 1987).
3. Burden of Premiums and Claims was shared by Central and State Governments in a 2:1 ratio.
4. The scheme was a multi-agency effort, involving GOI, State Governments, Banking Institutions, and GIC. CCIS was implemented till Kharif 1999 and it covered 763 lakh farmers for a premium of Rs. 404 crores against claims of 2303 crores.
Experimental Crop Insurance Scheme (ECIS) 1997-98
As demanded by various states from time to time attempts were made to modify the existing CCIS. During 1997, a new scheme, namely Experimental Crop Insurance Scheme was introduced during Rabi 1997-98 season with the intention to cover even those small and marginal farmers who do not borrow from institutional sources. This scheme was implemented in 14 districts of five states. The Scheme provided a 100 percent subsidy on premium. The premium and claims were shared by Central and State Governments in a 4:1 ratio. The scheme covered 4.78 lakh farmers for a sum insured of Rs.172 crores and the claims paid were Rs.39.78 crores against a premium of Rs.2.86 28 crores. The scheme was discontinued after one season and based on its experience National Agricultural Insurance Scheme was started.


The National Agricultural Insurance Scheme (NAIS)
It was introduced in the country from the rabi season of 1999-2000. Agricultural Insurance Company of India Ltd (AIC) which was incorporated in December 2002, and started operating in April 2003, took over the implementation of NAIS. This scheme is available to both loanees and non-loanees. It covers all food grains, oilseeds, and annual horticultural/commercial crops for which past yield data are available for an adequate number of years. Among the annual commercial and horticultural crops, sugarcane, potato, cotton, ginger, onion, turmeric, chilies, coriander, cumin, jute, tapioca, banana, and pineapple, are covered under the scheme. The scheme is operating on the basis of both „area approach?, for widespread calamities, and „individual approach?, for localized calamities such as hailstorms, landslides, cyclones, and floods.

Farm Income Insurance
The Farm Income Insurance Scheme was started on a pilot basis during 2003-04 to provide income protection to the farmers by integrating the mechanism of ensuring yield as well as market risks. In this scheme, the farmer?s income is ensured by providing minimum guaranteed income.

Livestock Insurance
Livestock insurance is provided by public sector insurance companies and the insurance cover is available for almost all livestock species. Normally, an animal is insured up to 100 percent of the market value. The premium is 4 percent of the sum insured for the general public and 2.25 percent for Integrated Rural Development Programme (IRDP) beneficiaries. The government subsidizes premiums for IRDP beneficiaries. Progress in livestock insurance, however, has been slow and poor (Table 5.9). In 2004-05 about 32.18 million heads were insured which comprised 6.58 percent of the livestock population. The implementation of livestock insurance as it obtains now does not satisfy the farmers much. The procedure for verification of claims and their settlement is a source of constant irritation and the subject of many jokes. This calls for a relook.


Weather Based Crop Insurance / Rainfall Insurance
During the year 2003-04, the private sector came out with some insurance products in agriculture based on weather parameters. The insurance losses due to vagaries of weather, i.e. excess or deficit rainfall, aberrations in the sunshine, temperature and humidity, etc. could be covered on the basis of weather index. If the actual index of a specific weather event is less than the threshold, the claim becomes payable as a percentage of deviation of the actual index. One such product, namely Rainfall Insurance was developed by ICICI-Lombard General Insurance Company. This move was followed by IFFCO-Tokio General Insurance Company and by the public sector Agricultural Insurance Company of India (AIC). Under the scheme, coverage for deviation in the rainfall index is extended and compensations for economic losses due to less or more than normal rainfall are paid.

   04-Jan-2021 |   Answer by: Ram