Overview
Crop insurance is purchased by farmers or related industries. This policy is subsidized by Indian government. Crop insurance policies are designed to offer compensation against either the loss of crops due to natural disasters, such as drought, hail, and floods and many more, or the loss of income due to declines in the prices of agricultural commodities.
The newly launched Crop Insurance schemes in India is corresponding to One Nation – One Scheme idea. It is integrated with best features of all preceding schemes and simultaneously, all previous weaknesses/ shortcomings have been changed. Agriculture Insurance Company(AIC) of India Limited has taken over the execution of NAIS, National Agricultural Insurance Scheme.
This policy was implemented until FY 2002-03 by General Insurance Corporation of India. Furthermore, Agriculture Insurance Company of India Limited (AIC) also carries out other insurance terms directly or indirectly regarding agriculture and its associated activities.
Important points
- Farmers have to pay a uniform premium of only 2% to for all Kharif crops.
- A uniform premium of 1.5% is to be paid for all Rabi crops by farmers.
- Farmers have to pay 5% premium in case of horticultural and annual commercial crops.
- Farmers have to pay very low premium rates.
- The Indian Government will pay the insurance amount to provide complete insured amount to the farmers against the loss of crop due to natural calamities.
- There is no upper limit on Government subsidy.
- The Governments bear the entire cost even if the balance premium is 90%.
Previously, there were provisions of capping(limiting) the premium rate under this policy. This resulted in the payment of lower claims to the farmers. This capping(limiting) was primarily imposed to border Government outgo on the premium subsidy. However, the capping(limiting) system has now removed. Now the farmers can get claim against full Sum Insured without any reduction.
National Crop Insurance Programme (NCIP)
National Crop Insurance Programme (NCIP) is formulated by merging the following schemes :
- Weather Based Crop Insurance Scheme (WBCIS)
- National Agricultural Insurance Scheme (NAIS)
- Coconut Palm Insurance Scheme (CPIS)
- Modified National Agricultural Insurance Scheme (MNAIS)
National Crop Insurance Programme(NCIP) came into power from Rabi 2013-14. It governs all the districts in the country. Notified by the concerned state, Loanee farmers are protected on compulsory basis under the National Crop Insurance Programme (NCIP). Non-loanee farmers will have to choose either WBCIS or MNAIS component. Private sector insurance provider with sufficient experience and infrastructure will be permitted to employ NCIP besides Agriculture Insurance Company of India (AlC).