Crop insurance, which was mostly restricted to farmers who had take crop loans from banks, will now be sold through agents of public sector general insurance companies.
The Agriculture Insurance Company (AIC), which offers yield-based and weather-based crop insurance programmes, recently tied-up with four general insurance companies— National Insurance, United India Insurance, Oriental Insurance and New India Insurance –for distributing its products. In the east, where AIC has tied-up with National Insurance, the product will distributed from December.
Initially, the tie-up is limited to Modified National Agricultural Insurance Scheme (MNAIS) and Weather Based Crop Insurance Scheme (WBCIS), according to Dasarathi Singh, regional manager, West Bengal, Tripura and Sikkim, AIC.
National Agricultural Insurance Scheme (NAIS), is being implemented in the country since Rabi 1999-2000, as a part of risk management in agriculture with the intention of providing financial support to the farmers in the event of failure of crops as a result of natural calamities, pests and diseases. The scheme is available to all the farmers – loanee and nonloanee - irrespective of their size of holding. However, loanee farmers are covered on compulsory basis in a notified area for notified crops whereas for non-loanee farmers scheme is voluntary. Due to operational difficulties in maintaining the accounts of non-loanee farmers, the product never found takers among them.
The Weather Based Crop Insurance aims to mitigate the hardship of the insured farmers against the likelihood of financial loss on account of anticipated crop loss resulting from incidence of adverse conditions of weather parameters like rainfall,temperature, frost and humidity. While Crop Insurance specifically indemnifies the cultivator against shortfall in crop yield, weather based Crop Insurance is based on the fact that weather conditions affect crop production even when a cultivator has taken all the care to ensure good harvest.