The National Agriculture Insurance Scheme (NAIS)

7/30/2019 The National Agriculture Insurance Scheme (NAIS)

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AGRICULTURE INSURANCE

SCHEME (NAIS)

राषय क ृ ि बीमा योजना

(र .क .ब .य ) By

Mayank Gaur

Mayank KashyapRahul Agrawal

Rajeev Aggarwal

Sarthak Mishra



Objectives

NAIS was introduced from 1999-2000 rabi season

To provide insurance coverage and financial

support to the farmers in the event of failure of any of the notified crop as a result of naturalcalamities, pests & diseases.

To encourage the farmers to adopt progressive

farming practices, high value inputs and higher technology in Agriculture.

To help stabilise farm incomes, particularly indisaster years.



Administration and Operating

Expenses

The A&O expenses would be shared equally bythe Central Government & respective StateGovernment

100% in 1st year, 80% in 2nd year, 60% in 3rd year,40% in 4th year, 20% in 5th year and 'zero' thereafter

Corpus Fund –

Managed by the IA – General Insurance Company of India

Government of India and State / UT on 50:50 basis.

Calamity Relief Fund for contributions to theCorpus Fund.

Reinsurance Cover in International Market



Crops Covered

Food crops - Cereals, Millets & Pulses

Annual Commercial/Horticultural crops -

Oilseeds, Sugarcane, Cotton & Potato

Reason –

Adequate yield data is available

More crops can be covered with the availability

of data



State and UTs

At present, the scheme is being implemented by the25 States and 2 Union Territories

Demand driven scheme The States / UTs opting for the Scheme, would be

required to take up all the crops identified for coverage in agiven year.

Exit clause – Three years

Till Kharif 2009 1524 lakh farmers

Area of 2363 lakh hectares Rs. 174910 crore of the sum insured.

Rs. 18725 of claims made

Premium of Rs. 5266 crore benefiting about 427 lakhfarmers.



Farmers Covered

All farmers - Sharecroppers, Tenant farmers,

etc

Growing the notified crops in the notified areas Participation

On a Compulsory Basis: All farmers growing

notified crops and availing Seasonal Agricultural

Operations (SAO) loans from Financial

Institutions i.e. Loanee Farmers.

On a Voluntary Basis: All other farmers growing

notified crops (i.e., Non-Loanee farmers) who opt

for the Scheme.



Risks Coverage

Comprehensive risk insurance will be provided

to cover yield losses due to non-preventable

risks, viz.:

Natural Fire and Lightning Storm, Hailstorm, Cyclone, Typhoon, Tempest,

Hurricane, Tornado etc.

Flood, Inundation and Landslide

Drought, Dry spells

Pests/ Diseases etc.



Premium Rates

S.N

o Season Crops Premium rate 1 Kharif Bajra & Oilseeds 3.5% of SI or Actuarial rate,

whichever is less

Other crops (cereals, other millets& pulses)

2.5% of SI or Actuarial rate,whichever is less

2 Rabi Wheat 1.5% of SI or Actuarial rate,

whichever is less

Other crops (other cereals,

millets, pulses & oilseeds)

2.0% of SI or Actuarial rate,

whichever is less

3 Kharif &

Rabi

Annual Commercial / annual

Horticultural crops

Actuarial rates



Premium Rates

Premium Subsidy

50% subsidy in premium is allowed in respect of Small & Marginal farmers,

Shared equally by the Government of India and State/UT

Govt.

The definition of Small and Marginal farmer wouldbe as follows:

Small Farmer:

A Cultivator with a land holding of 2 hectares (5 acres) or less, as defined in the land ceiling legislation of theconcerned State/ UT.

Marginal Farmer:

A Cultivator with a land holding of 1 hectare or less (2.5

acres).



Unit of Insurance

Area Approach

Gram Panchayat, Mandal, Hobli, Circle, Phirka,

Block, Taluka etc.

Widespread calamities

Individual approach

Only in limited areas, in experimental stage Local events (hailstorm, landslide, cyclone and

flood)



Levels of Indemnity

Three levels of Indemnity

Low Risk - 90%,

Medium Risk - 80%

High Risk –

60%

Higher indemnity, additional premium



Indemnity

Indemnity shall be calculated as per the followingformula

(Shortfall in Yield/Threshold yield ) X Sum Insured for the farmer

Shortfall in Yield = Threshold Yield - Actual Yield

Actual and Threshold Yields(AY) per hectare of the insuredcrop for the defined area in the insured season

All the insured farmers growing that crop in the definedarea

Localised phenomenon, the IA will estimate suchlosses at individual farmer level in consultationwith DAC/State/UT.



Approval Procedure

State Govt Cut off Date Yield Data

Implementation Agency ClaimCalculation

ClaimCheques

Nodal Banks Farmer AccountDeposit Notice Board



Management and Review

Agricultural situation to be closely monitored

District Level Monitoring Committee - Fortnightly

reports of agricultural situation

Area sown, seasonal weather conditions, pestincidence, stage of crop failure (if any) etc.

Operations to be reviewed annually, and

modifications as may be required would be

introduced.

Periodic Appraisal Reports prepared by Ministry of

Agriculture, the Government of India /

Implementing Agency.



Challenges

The coverage is limited to certain crops andcertain areas for which yield data is available.

Lack of credit institutions in terms of coverage

the farmer would be deprived of insurancecoverage.

Corruption

Lack of proper communication of yield data

Feasibility of the scheme i.e. premium in caseof small and marginal farmers is subsidized by50 % and is shared equally by Central andstate government.



Contd

The indemnity coverage for the high risk areas

is 60% as a result the marginal farmers are not

able to take full advantage; thereby making the

scheme less attractive to farmers Problems w.r.t Area figures

Absence of appropriate institutions, delivery

mechanism, procedural and governanceissues had become serious impediments in

the effective implementation of the scheme



Way forward

Broad based coverage

Comprehensiveness or a package approach

Area approach

Coverage of major crops

Public private partnerships

Examining the possibility of proxy measures.



Thankyou.

The National Agriculture Insurance Scheme (NAIS)

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