UPA's crop cover policy to come under NDA scanner

KOLKATA: The Narendra Modi government is planning to review the National Crop Insurance Programme (NCIP) introduced by the UPA last year even as farmers are facing the spectre of failed crop in anticipation that El Nino may reduce rainfall by 10-20 per cent.

The agriculture ministry has sought views from all states on whether they would the like to continue with the new programme or bring back the previous National Agriculture Insurance Scheme where the claims were funded equally by the central and the state governments.

A senior official with Agriculture Insurance Company of India Ltd said at least three states, including Gujarat, wanted the agriculture ministry to review the new scheme and meanwhile continue with the old one for another year.

Some states, including Tamil Nadu, demanded repeal of the NCIP even before the Modi government came to power, arguing that that farmers' burden on premium payment has actually increased now.

In the old scheme, farmers had to pay 1.5 per cent to 3.5 per cent of the sum insured, depending on the season and crop. Many state governments used to subsidise that burden too. Premiums have risen to 3.8-4 per cent in many districts under the new scheme, forcing farmers to pay more to get a risk cover against crop failure.

The ministry has told the state governments to submit their views by this month. ET has a copy of the letter written on June 10 by Agriculture Secretary Ashish Bahuguna.

The National Crop Insurance Programme was formulated by merging the pilot Modified National Agriculture Insurance Scheme, pilot Weather-Based Crop Insurance Scheme and Coconut Palm Insurance Scheme.

Premium under the new scheme is being calculated on the basis of actuarial calculation and the entire claim liability is being settled by the insurance company that offered the risk cover.

It was introduced in last year's Rabi season and the government has also allowed private sector players like HDFC Ergo and Reliance General Insurance, alongside the state-run Agriculture Insurance Company of India, to implement the NCIP.