A.

National Agricultural Insurance Scheme (NAIS)

Objective: 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 natural calamities, pests & diseases. Crops covered: a. Food crops (Cereals, Millets & Pulses) b. Oilseeds c. Sugarcane, Cotton & Potato (Annual Commercial / Annual Horticultural crops) States covered: All States and Union Territories Farmers to be covered: Compulsory to all loanee farmers and voluntary to non-loanee farmers. RISKS COVERED & EXCLUSIONS: 1) Natural Fire and Lighting 2) Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado etc. 3) Flood, Inundation and Landslide 4) Draught, Dry spells 5) Pests/Diseases, etc. Losses arising out of war & nuclear risks, malicious damage & other preventable risks shall be excluded.
SUM INSURED/LIMIT OF COVERAGE: In case of Loanee farmers the

Sum Insured would be at least equal to the amount of crop loan advanced. Further, in case of Loanee farmers, the Insurance Charges shall be additionality to the Scale of finance for the purpose of obtaining loan. Premium Rates Sr. No. 1. Season Kharif Crops Bajra & Oilseeds Premium rates

2.

Rabi

3.

Kharif & Rabi

3.5% of SI or Actuarial rate, whichever is less. Other crops (cereals, 2.5% of SI or Actuarial other millets & rate, Pulses) whichever is less Wheat 1.5% of SI or Actuarial rate, whichever is less Other crops (other 2.0% of SI or Actuarial cereals, millets, rate, whichever is less Pulses & Oilseeds) Annual Commercial / Actuarial rates Annual Horticultural crops
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 PREMIUM SUBSIDY: Premium subsidy in case of small and marginal

farmers will be shared equally between Central and concerned State Government, up to 10% of premium. Administrative and operational expenses to extent of 20% of these expenses will be shared equally between Central and State Governments.
Total publicity and bank service charges to be shared equally by Central

and State Governments. Risk implementing Agency in meeting claims will be restricted to 100% of premium in case of food and oilseeds crops and 150% for annual commercial/horticultural crops. As provided in the scheme, indemnity claims will be settled on the basis of yield data furnished by State Government based on requisite number of Crop Cutting Experiments (CCEs) conducted under General Crop Estimation Survey (GCES) and not on any other basis like Annavari/Paisawari, etc.

B. Modified National Agricultural Insurance Scheme (MNAIS)

Govt. of India vide letter no.13011/02/2008-Credit II Pt. dated 28th Sept., 2010 came out with Modified National Agricultural Insurance Scheme (MNAIS) to be implemented in 50 selected districts of India on pilot basis in place of National Agricultural Insurance Scheme (NAIS) that means NAIS will be withdrawn for both loanee and non loanee farmers from those area/crops where MNAIS is implemented. The main features of the scheme are given below.
Objective: MNAIS aims at sustainable production in agriculture sector,

thereby ensuring food security, crop diversification and enhancing growth and competitiveness from agriculture sector, besides protecting farmers from production risks. Loanee farmers are insured under compulsory category while non-loanee farmers are insured under voluntary category. NAIS is withdrawn for those areas/crops of districts, in which MNAIS is implemented.
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 Concurrent evaluation of parameters and impact of scheme will be undertaken, after two years of implementation of MNAIS, by an external agency.

Crops covered: a. Food crops (Cereals, Millets & Pulses) b. Oilseeds c. Annual Commercial/Horticultural crops
States and areas to be covered: 50 districts in different States Farmers to be covered: All farmers including sharecroppers, tenant

farmers growing the notified crops in the notified areas.

Risks covered & exclusions: i. Standing crops: non-preventable risks like- Natural fire, lightening, storm, cyclone, flood, landslide, drought, pest/diseases, etc. Prevented sowing/planting risk: In case farmer of an area is prevented from sowing/planting due to deficit rainfall or adverse seasonal conditions, such insured farmer who failed to sow/plant, shall be eligible for indemnity. The indemnity payable would be a maximum of 25% of the sum insured. Post harvest losses: coverage is available only for those crops, which are allowed to dry in the field after harvesting against specified perils of cyclone in coastal areas, resulting in damage to harvested crop. Further, the coverage is available only upto a maximum period of two weeks from harvesting.

ii.

iii.

Sum insured: The sum insured would be at least equal to the amount of

crop loan sanctioned/advanced, which may extend upto the value of the threshold yield of the insured crop at the option of insured farmer.
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 Premium rates & Subsidy: Premium rates are to be worked out on

actuarial basis. However, the premium paid by the farmer is subsidized on following basis.

Sr. No. 1. 2. 3. 4. 5.

Premium slab Upto 2% >2-5% >5-10% >10-15% >15%

Subsidy to farmers Nil 40% subject to minimum net premium of 2% 50% subject to minimum net premium of 3% 60% subject to minimum net premium of 5% 75% subject to minimum net premium of 6%

The proposed scheme has following main features compared to NAIS: 1. Actuarial premiums are paid for insuring crops and hence claims liability is on insurer. 2. Unit area of insurance for major crops is village/village panchayat. 3. Indemnity amount is paid for prevented sowing/planting risks and for post harvest losses, due to cyclones. 4. On account payment upto 25% of likely claim under MNAIS is paid as advance, for providing immediate relief to farmers. 5. Uniform seasonality norms are applicable for both loanee and nonloanee farmers. 6. More proficient basis for calculating threshold yield (average yield of last seven years excluding upto two years of declared natural calamity) will be applicable; and 7. Minimum indemnity level is 70% damage, instead of 60% as in NAIS.

C. Weather Based Crop Insurance Scheme (WBCIS)

During 2012-13 for both kharif 2012 and Rabi 2012-13, the GOI has decided to continue Pilot Weather Based Crop Insurance Scheme (WBCIS) in selected districts. The scheme will be implemented in twenty States viz. AP, Assam, Bihar, CG, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, MP, Maharashtra, Meghalaya, Orissa, Punjab, Rajasthan, TN, UP, Uttarakhand, WB. NAIS will be withdrawn for loanee farmers from the areas/crops where WBCIS is implemented. The major features of the scheme are given below.

Object: Pilot WBCIS aims to mitigate hardships of insured farmers against

likelihood of financial loss on account of anticipated crop loss resulting from incidence of adverse conditions of weather parameters like deficit or excess rainfall and also other parameters like temperature, frost, humidity, wind, etc.
Eligibility: All farmers both loanee and non-loanee, are eligible. Insurance

will be compulsory to loanee and optional for non-loanee farmers.

Insurance Companies: Agriculture Insurance Co. of India Ltd. (AIC) and

ICICI-Lombard, IFFCO-TOKIO General Insurance Co., Cholamandalam MS General Insurance Co., HDFC- ERGO General Insurance Co.
Selection of area: Areas, where WBCIS will be implemented, will be

notified by the State Governments concerned. Crops covered: Major cereals, millets, pulses & oilseeds, Commercial/ Horticultural Crops Premium rate: Actuarial rates of premium would be worked out by insurance companies including AIC using Standard Premium Rating Methodology and rates are capped at 10% during Kharif 2011 season and 8% during Rabi 2011-12 for food crops and oilseeds. Farmers will actually pay premium for food and oilseeds crops at par with existing rates of NAIS. In case of annual commercial/horticultural crops, cap of 12% on actuarial rates of premium will be applicable. The detailed structure of Premium Payable by the insured is tabled below. Food Crops and Oilseeds Crops

Premium Payable by insured

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1.

1.5% or Actuarial Rate, whichever is less. 2. Other crops (other 2.0% or Actuarial Rate, whichever is cereals, millets, pulses less. & oilseeds) Annual Commercial/Horticultural Crops S.No. Premium Slabs Subsidy 1. Upto 2% No Subsidy 2. >2-5% 25%, subject to minimum net Premium of 2.00% payable by farmer. 3. >5-8% 40%, subject to minimum net Premium of 3.75% payable by farmer. 4. >8% 50%, subject to minimum net Premium of 4.80% and maximum net premium of 6% payable by farmer.
Sum insured: Maintaining maximum limit of sum insured broadly

Wheat

equivalent to cost of cultivation, non-loanee farmers will have flexibility to insure smaller amounts within maximum limit, but not less than 50% of maximum limit of sum insured. ---