Agriculture Ministry moves cabinet note on new crop insurance scheme

NEW DELHI: The Agriculture Ministry has moved a cabinet note on a new crop insurance scheme under which farmers will pay less premium of up to three per cent.

Of the total premium fixed by the insurers under the existing crop insurance schemes NAIS and MNAIS, farmers are presently paying a premium of up to 3.5 per cent and 8 per cent, respectively, and the rest is borne by the government.

On an average, insurance firms are charging an overall premium in the range of 1-20 per cent for agricultural crops.

"In the cabinet note moved for inter-ministerial consultations, the Agriculture Ministry has proposed a new national crop insurance scheme with lower premium rate to be paid by farmers," sources said.

The Ministry has proposed a premium of three per cent required to be paid by farmers. And for the benefit of farmers in vulnerable and disaster-prone areas, the ministry has recommended premiums without any cap unlike the existing scheme MNAIS, sources added.

Under the Modified National Agricultural Insurance Scheme (MNAIS), premiums are capped at 13 per cent in most vulnerable areas for kharif crops, while at 11 per cent 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 insitutions. Even private insurers would be allowed to offer the scheme.

According to sources, the ministry is aiming to roll out the scheme in the forthcoming rabi season starting October.

Currently, about 20 per cent (40.27 million hectare) of the total farm land is insured under the existing schemes, as per government data.

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

Major crops insured are oilseeds, rice, wheat, pulses and coarse grains.

The Centre is implementing various farm insurance schemes since 1985 to insulate farmers against agri-risks.

Currently, it is offering three crop insurance schemes -- National Agricultural Insurance Scheme (NAIS), Modified NAIS and weather-based crop insurance scheme.