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Crop insurance schemes in India

• PRESENTED BY:- AZAR SHAIKH 99 ARJUN SHARMA 101 VIKRAM SHEDGE 102 JANHAVI SHINDE 103 VIKRAM SHINDE 104 VAISHALI SHIRSAT 106 DURGESH SHIVADE 107 JAYPAL SIRSAT 108 MAHESH SOLASE 109

Crop insurance

• Definition:- Crop insurance refers to an insurance which

insures farmers and crop producers against the their loss of crops due to natural disasters, such as hail drought, and floods.

Risks in Indian agriculture

• Yield risk:-• Weather• Pest & disease• Fire• Inputs quality

• price risk :-• Influenced by demand & supply factors

Objectives of crop insurance

• To stabilize farm income & investment.• To guard against disastrous effect of crop losses.• Helps to farmers to initiate production activity.• Farmers can grow more profitable crops under

certain risks.• farmers can adopt improved technologies for

increasing crop production.• condition of farmers becomes unstable due to

natural calamities & price fluctuation.

Crop insurance schemes

• First Individual Approach Scheme 1972-1978 • Pilot Crop Insurance Scheme (PCIS) 1979-1984 • Comprehensive Crop Insurance Scheme (CCIS) 1985-99 • Experimental Crop Insurance Scheme (ECIS) 1997-98 • National Agricultural Insurance Scheme (NAIS) 1999• pilot scheme of seed crop insurance (PSSCI)1999-2000• Farm income insurance scheme (FIIS) 2003-04• Weather based crop insurance scheme

First Individual Approach Scheme

• introduced in 1972-73 by general insurance corporation (GIC)

• crop covered:-• Initially only cotton H-4• later ground nut, Wheat, Potato

• States covered:-• Andra pradesh, Gujrat, Karnataka, Maharashtra,

Tamilnadu, West Bengal.

• Farmers covered- 3110 • premium – 4.54 lakh• Claims – 37.88 lakh

Pilot Crop Insurance Scheme

• Launched by GIC in 1984• V. M. dandekar suggested suitable approach

to be followed in the schemes.• It provides insurance cover against a decline

in crop yield below threshold level.• Based on “Area approach”• Crops covered:- Cereals, Millets, Oilseeds,

Cotton, Potato & Chickpea.

Contd.• only to loanee farmers on voluntory basis• States covered :- 12 states covered such as

Andra pradesh, Maharashtra, Gujrat, etc.• farmers covered:- 6.23 lakh• premium collected:- 195.01 lakh• claims paid:- 155.68 lakh• claim ratio:- 79.83%• premium paid was shared between GIC &

state govt. in ratio of 2:1

Contd.

Lacking of scheme:- Small & marginal farmers couldnot

participate because farmers have poor access to institutional credit.

Unit of insurance was very large Lack of awareness among farmers Major commercial crops like

Cotton & sugarcane excluded.

Comprehensive Crop Insurance Scheme (CCIS)

• this scheme implmented in 1985-1999• This scheme linked to short term credit• Implemented based on homogenous area

approach.• CCIS was confined only to farmers who

borrowed seasonal agril. Loan• CCIS was compulsory for loanee farmers.• Till kharif 1999, scheme adopted in 15 states &

2 UT’s

Contd.

• Salient features:-– it covers farmers availing crop loans from financial

institutions, for growing food crops & oilseeds.– the coverage was restricted to 100% of crop loan

subject to maximum of rs. 10000 per farmers– Premium rates:- 2% for cereals 7 millets

1% for pulses &oilseeds Farmers shares of premium was collected at the

time of disbursement of loan

Contd.

• Burden of Premium and Claims was shared by Central and State Governments in a 2:1 ratio.

• Farmers covered:- 763lakh• Premium collected-404 crores• claims paid-2303crores.• CCIS were highly skewed towards Gujrat about

(58%) to groundnut farmers.• Subsidy to small & marginal farmers 50% of

premium

Lackings of the CCIS

• The scheme covers only loanee farmers, leaving non-loanee farmers who are in majority.

• Covers only food crops, oilseeds and pulses and other crops are left out.

• Sum insured was maximum to Rs 10,000

• High claims ratio because of low, flat premium rates.

Experimental Crop Insurance Scheme(ECIS)

• This scheme introduced in Rabi 1997-98• Covers small & marginal farmers those who

not borrow from institutional institutes• Implemented in 14 districts of 5 states• 100% subsidy provided on premium• Premium & claims were shared by central &

state govt. in 4:1 ratio

Contd.

• Farmers covered- 4.78 lakh for sum insured 172 crore

• Claims paid- 39.78 crore• Premium collected- 2.86 crore• This scheme discontinued after one season

National Agricultural Insurance Scheme (NAIS)

• Scheme introduced from rabi season of 1999-2000• Scheme for both loanees & non-loanees farmers• Scheme operating on both “Area approach” & “Individual approach”• Crops covered:- Food grains, Oilseeds, annual horticulture/

commercial crops.• Premium rates:-

• Bajara & oilseeds - 3.5%• Kharif crops -2.5%• Wheat - 1.5%• Other rabi crop -2.0%

• In case of horticultural/ commercial crops, actuarial rates are being charged.

Contd.

• Small and marginal farmers are entitled to a subsidy of 50 per cent of the premium charged from them, which will be shared 50:50 by the central and state governments.

• As against a limit of sum insured Rs 10,000 , sum insured can be as high as 150 percent of average yield.

• The premium subsidy will be phased out over a period of five years.

• NAIS is a multi agency scheme.• Central Govt, State Govt, Financial Institution and GIC

will play their roles in implementation.

Contd.

• Coverage of NAIS:-» Initially introduced in 9 states & UT’s covered

5.8 lakh farmers & 7.8 Lakh ha. Cropped area» Upto 2006-07, scheme covers 21 states & UT’s» Total farmers covered- 970.8 lakhs» Total sum assured- 97183 crore» Total premiums collected- 2944 crore» Total claims paid- 9857 crore

pilot scheme of seed crop insurance (PSSCI)

• This scheme introduced by govt. of India a central sector scheme as PSSCI in 1999-2000.

• This is the first scheme which provides security to seed growers

• This scheme covers the Breeders Seed and Certified seed of all major crops in 10 states

• It covers Wheat, Paddy, Maize, Bajari, Jowar, Gram, Red gram, Groundnut, Soybean, Sunflower and Cotton

• PSSCI covers the seed crop at field stage, arising out of failure, rejection of seed crop, loss in expected raw seed , loss of seed crop after the harvest

Contd.• Covers loss in germination • Loss in certification stage.• Also covers non preventable risk like flood, drought, cyclone

etc.• The sum insured is equivalent to 3 or 5 years average seed

yield multiplied by procurement price/sale price of seed crop.• premium rates:-

» 2.0% for Ground nut and Wheat» 2.5% for Sunflower» 3.0% for paddy» 3.5% for Jowar» 5.0% for Gram, Redgram, Bajara, Maize, Soybean

& cotton

Farm income insurance scheme (FIIS)

• This scheme introduced in Rabi 2003-04• Scheme implemented in 21 districts of 13 states.• A farmers production and price risk for the crop produced

by him, would be protected by ensuring minimum guaranteed income.

• Initially the programme cover paddy and wheat only.• A premium subsidy of 75% is proposed to be given in case

of small and marginal farmers and 50% for other farmers.• Upto 2004 total farmers covered under this scheme were

27329.

Weather based crop insurance scheme

• This scheme introduced in kharif 2007• This scheme covers risk of weather related issues like

rainfall, frost, heat, humidity, etc.• WBCIS is built upon the weather conditions affect crop

production even when cultivar has taken all the care to ensure good harvest.

• This scheme run by different private institutions in different states

• It covers small & marginal farmers• This scheme compulsory for loanee farmers & voluntary

for non-loanee farmers

Contd.

• Crops covered:-millets, pulses, oilseeds & horticultural crops.

• States covered- Bihar, Chhattisgarh, Haryana, M.P, Punjab, Rajsthan & U.P.

• Premium rates:-• Wheat- 1.5%• Other crops- 2.0%• Horticultural crops- Actuarial rates

CONCLUSION

• The market for crop insurance in developing is vast as acerage under cultivation.

• Crop insurance will vary from country to country depending upon national priorities & the objectives set & the limitations imposed under crop insurance scheme.