Iffco-Tokio launches weather insurance in five districts

The Iffco-Tokio General Insurance Company has introduced Barsha Bima Yojana (BBY), a weather insurance policy, for the Orissa farmers during the current kharif season.

The scheme has been launched in five districts of the state on a pilot basis. The districts are Ganjam, Cuttack, Kendrapada, Khurda and Nayagarh. “We will extend the policy to other districts subsequently based on the response from farmers”, said A K Mishra, the Orissa state head of the private general insurance company.

Describing BBY as an index-based weather insurance product, he said, it provided protection to farmers against anticipated crop loss due to either excess or deficiency of rainfall depending upon the geographical locations, weather conditions and crop requirements of a specific region.

The prominent feature of the product is that it is not linked to the declaration of drought or flood by the government. The insurance claims will be calculated on the basis of the rainfall data recorded at the weather station of a particular area, he told Business Standard.

The National Krishi Bima Yojana, introduced by the government, only benefits farmers when the state government declares either flood or drought in a particular area.

The BBY generally covers the farmers as a group policy through co-operative banks and primary agriculture cooperative societies (PACS). The individual farmers can also buy this policy. Initially, the company had decided to insure only the paddy crop in kharif season.

As the product is farmers’ friendly, Mishra hoped the farmers would appreciate it and come forward to insure their crop to protect it from rain-related natural calamities. The farmers are expected to benefit from the product as the state is visited by either flood or drought at regular intervals.

The company expected to collect around Rs 25 lakh premium from the newly introduced insurance scheme. “As it is a new product, we have fixed a low target”, Mishra said.

With introduction of BBY in Orissa, this insurance product of the company is now available in 11 states.

In six out these 11 states, the insurance cover is available for both deficient and excess rainfalls. These states are Orissa, West Bengal, Tamil Nadu, Gujarat, Maharastra and Rajasthan.

In other states of Punjab, Andhra Pradesh, Uttar Pradesh, Chhatisgarh and some districts of Madhya Pradesh and Rajasthan, BBY will cover only the crop affected due to deficient rainfall. The policy period depends on the monsoon period of the respective states.