Agricultural Insurance Schemes Available for Farmers in India
The need for Agricultural Insurance Schemes
Indian agriculture is highly susceptible to risks such as floods and drought. Due to these circumstances, whole cultivations and yield are destroyed. So farmers are unable to pay their debts and no income will be received for the particular season. Since they don’t have any money to live and suffering from high debts farmers tend to suicide. This has become a major concern in most developing countries including India.
To overcome this problem and to ensure the credit eligibility for next season, the Government of India has introduced various insurance schemes throughout the country.
1. Pradhan Mantri Fasal Bima Yojana (Prime Minister’s Crop Insurance Scheme)
This insurance scheme has been introduced to protect food crops, oilseed crops, and annual horticultural/commercial crops. It envisages a uniform premium for farmers as,
Kharif crops - 2% of sum insured
Rabi crops - 1.5% of sum insured
Annual horticulture/commercial crops – 5% of sum insured
This scheme is implemented by a multi-agency framework by selected insurance companies and managed by committees such as,
State Level Co-ordination Committee on Crop Insurance (SLCCCI)
Sub Committee to SLCCI
District Level Monitoring Committee (DLMC)
Considered risks that lead to crop loss
Yield losses (Non-preventable risks)
Natural fire and lightening
Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, etc.
Flood, Inundation, and Landslide
Drought, Dry spells
Prevented sowing (Adverse weather conditions)
Postharvest losses (specific perils of cyclone / cyclonic rains, unseasonal rains throughout the country)
Localized calamities (hailstorm, landslide, and Inundation)
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2. Weather Based Crop Insurance Scheme (WBCIS)
These insurance schemes have been introduced to mitigate hardships caused by adverse weather conditions relating to temperature, rainfall, humidity, etc. WBCIS covers food crops, oilseed crops, and horticultural/commercial crops.
Major weather perils that are covered in this scheme are,
Rainfall – Deficit Rainfall, Excess rainfall, Unseasonal Rainfall, Rainy days, Dry-spell, Dry days
Temperature– High temperature (heat), Low temperature
A combination of the above
The period from sowing up to the crop maturity is considered as the insurance period under WBCIS.
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3. Coconut Palm Insurance Scheme (CPIS)
Since coconut is a perennial crop, it has to face many risks compare to other crops. Sometimes these risks become large enough to destroy the whole plantation bringing an enormous loss for the farmers. So the Coconut Development Board introduced CPIS for small and medium-scale farmers to overcome these losses.
As risks covering under this scheme; Storm, hailstorm, typhoon, cyclone, tornado, flood and heavy rains, irreversible pest damages, forest fire, bush fire, accidental fire, lightening, earthquake, landslide, Tsunami, and severe drought can be identified.
The premium rate per palm is as follows
Plant age 4-15 years – Rs. 9.00
Plant age 16-60 years – Rs.16.00
4. Unified Package Insurance Scheme (UPIS)
This scheme is introduced as a pilot in 45 districts to protect financially and comprehensively cover risks of crops, assets, and life and student safety to farmers.
This scheme has 7 sections as,
1) Crop insurance
2) Building and content insurance
3) Personal accident insurance
4) Agriculture pumpset insurance
5) Agricultural tractors insurance
6) Student safety insurance
7) Life insurance
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5. National Agricultural Insurance Scheme (NAIS)
This scheme has been introduced by the Government of India to provide insurance coverage and financial subsidy for farmers in the event of crop losses. Premium rates of covered crops are as follows.
6. Farm Income Insurance Scheme (FIIS) – A previous one
FIIS targets yield and income which are critical components of farmer’s income. Insured farmers can get a guaranteed income through this. In this scheme, a guaranteed income is determined using past yield and Minimum Support Price (MSP). FIIS protects farmers by insuring production and market risk.