MainMenuEnglishLevel-3 Circular Annexure

7/29/2019 MainMenuEnglishLevel-3 Circular Annexure

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A. National Agricultural Insurance Scheme (NAIS)

Objective: To provide insurance coverage and financial support to thefarmers 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. Oilseedsc. Sugarcane, Cotton & Potato (Annual Commercial / Annual Horticulturalcrops) States covered: All States and Union Territories

Farmers to be covered: Compulsory to all loanee farmers andvoluntary to non-loanee farmers.

RISKS COVERED & EXCLUSIONS:1) Natural Fire and Lighting2) Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado

etc.3) Flood, Inundation and Landslide4) Draught, Dry spells5) 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 beadditionality to the Scale of finance for the purpose of obtaining loan.

Premium Rates

Sr.No.

Season Crops Premium rates

1. Kharif Bajra & Oilseeds 3.5% of SI or Actuarialrate, whichever is less.

Other crops (cereals,other millets &

Pulses)

2.5% of SI or Actuarialrate,

whichever is less2. Rabi Wheat 1.5% of SI or Actuarial

rate, whichever is less

Other crops (other cereals, millets,Pulses & Oilseeds)

2.0% of SI or Actuarialrate, whichever is less

3. Kharif &Rabi

Annual Commercial /Annual Horticultural crops

Actuarial rates

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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 28 th Sept., 2010

came out with Modified National Agricultural Insurance Scheme (MNAIS) to beimplemented in 50 selected districts of India on pilot basis in place of NationalAgricultural Insurance Scheme (NAIS) that means NAIS will be withdrawn forboth loanee and non loanee farmers from those area/crops where MNAIS isimplemented.

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.

ii. 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.

iii. 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 amaximum period of two weeks from harvesting.

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.

Premium slab Subsidy to farmers

1. Upto 2% Nil

2. >2-5% 40% subject to minimum net premium of 2%



5. >15% 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 non-

loanee 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.

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C. Weather Based Crop Insurance Scheme (WBCIS)

During 2012-13 for both kharif 2012 and Rabi 2012-13, the GOI has decided tocontinue Pilot Weather Based Crop Insurance Scheme (WBCIS) in selecteddistricts. 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 whereWBCIS 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 resultingfrom 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. Insurancewill be compulsory to loanee and optional for non-loanee farmers.

Insurance Companies: Agriculture Insurance Co. of India Ltd. (AIC) andICICI-Lombard, IFFCO-TOKIO General Insurance Co., CholamandalamMS General Insurance Co., HDFC- ERGO General Insurance Co.

Selection of area: Areas, where WBCIS will be implemented, will benotified 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 byinsurance companies including AIC using Standard Premium RatingMethodology and rates are capped at 10% during Kharif 2011 season and8% during Rabi 2011-12 for food crops and oilseeds. Farmers will actuallypay premium for food and oilseeds crops at par with existing rates ofNAIS. 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. Wheat 1.5% or Actuarial Rate, whichever isless.

2. Other crops (othercereals, millets, pulses& oilseeds)

2.0% or Actuarial Rate, whichever isless.

Annual Commercial/Horticultural CropsS.No. Premium Slabs Subsidy

1. Upto 2% No Subsidy

2. >2-5% 25%, subject to minimum net Premiumof 2.00% payable by farmer.

3. >5-8% 40%, subject to minimum net Premiumof 3.75% payable by farmer.

4. >8% 50%, subject to minimum net Premiumof 4.80% and maximum net premium of6% payable by farmer.

Sum insured: Maintaining maximum limit of sum insured broadlyequivalent to cost of cultivation, non-loanee farmers will have flexibility toinsure smaller amounts within maximum limit, but not less than 50% ofmaximum limit of sum insured.

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MainMenuEnglishLevel-3 Circular Annexure