TN asks Centre not to implement National Crop Insurance Scheme with current structure

State wants NAIS to exist in the interest of small and marginal farmers

Tamil Nadu has asked the Centre not to implement the National Crop Income Insurance Scheme (NCIIS) in the current structure.

In his address during the states agriculture ministers meeting in New Delhi, TN agriculture minister, SS Krishnamoorthy, said the proposed scheme offers risk coverage against the loss of crop yield and covers the risk of price falling below the MSP.

The guaranteed income under the scheme is to be calculated on the basis of the average yield of the past seven years, excluding two calamity years which are to be declared by the state, a uniform indemnity level of 70 per cent and reference price which would be the MSP. The premium is to be calculated on an actuarial basis, instead of nominal basis as in NAIS (National Agricultural Insurance Scheme).

The proposed scheme has the same features as the old MNAIS (Modified National Agricultural Insurance Scheme) besides covering the risk of market price falling below MSP. Considering that the market price for major crops rarely falls below the MSP, the protection clause may not be activated for TN and the scheme may get operated effectively only as MNAIS.

Under MNAIS, the premium is calculated on an actuarial basis, resulting in high premium rates in almost all districts. Further, the cap on insurance premium ensures that the sum insured is very low in high risk districts, he said.

Adding that the state had objected to implementation of MNAIS, he said, the increase in premium should be fully borne by the Centre. He noted, the state was allowed to implement NAIS for 2014-15 and urged the Centre to allow implementation of NAIS and the proposed scheme, namely the NCIIS, should not be implemented, as it adversely affects the farmers.

The high insurance premium rates, apart from increasing the financial burden on farmer, raises the subsidy component of premium to be borne by the state manifold. Even after sharing of the subsidy on the insurance premium, the extra burden on the state will increase 3-4 times. “It is requested that the full subsidy on insurance premium should be borne by the Centre,” he said.

Farmers growing premium varieties will not benefit as market prices are to be fixed for generic varieties only. The claim of compensation beyond 500 per cent of premium collected at the national level is now being shared by the state and the Centre. Under the proposed scheme, compensation beyond 300 per cent of premium collected at the state level has to be shared. This may increase the financial burden on the state.

The minister urged the Centre to address the issues raised by the State and Tamil Nadu  be allowed to continue with NAIS in the interest of small and marginal farmers.