The Hindu : Andhra Pradesh News : New crop insurance scheme for ryots

Online edition of India's National Newspaper
Sunday, Jun 06, 2004

Andhra Pradesh

Andhra Pradesh

New crop insurance scheme for ryots

By Ravi Reddy

NIZAMABAD, JUNE 5. The Agriculture Insurance Company of India Limited (AIC), formed by the Union Government to provide financial security for agriculture and allied activities through insurance schemes, has come up with `Varsha Bima', which provides cover against deficit rainfall.

The AIC has taken over the implementation of the National Agriculture Insurance Scheme (NAIS) from the General Insurance Corporation of Indian (GIC) from April last. The new scheme is available to cultivators only and is being launched on a pilot basis during kharif 2004 for select crops in select mandals of six districts in the State.

Paddy and maize crops in seven mandals in Nizamabad district, viz, Navipet, Nizamabad, Yedpalli, Makloor, Dichpalli, Gandhari and Varni, are covered under the `Varsha Bima' scheme. The coverage option includes seasonal rainfall, sowing failure, rainfall distribution index, agronomic optimum index and catastrophe cover. The officials of the AIC met the District Collector, D.V.Raidu, and the agriculture department officials to explain the salient features of the scheme.

Mr. Raidu, speaking to The Hindu on Saturday, said that the `Varsha Bima' was a mechanism for providing effective risk management aid to those individuals and institutions likely to be impacted by adverse rainfall incidence. The scheme covers anticipated shortfall in crop yield on account of deficit rainfall and the insurance operates during June 1 and September 30 only. The cultivator is given chance to buy the insurance scheme till June 15 only.

The Collector said the scheme guarantees a pay-out of claims upon adverse incidence of rainfall. He pointed out that the claims arose when the `Actual Rainfall Incidence' during the insurance period fell short of the `Normal Rainfall Incidence'. In such cases all insured cultivators under a particular crop and option would be deemed to have suffered the same deviation and become eligible for claims.

There are five options for insurance coverage. The first option is seasonal rainfall insurance, which covers negative deviations in `actual rainfall' from `normal rainfall' beyond 20 per cent during June to September. The coverage under sowing failure is against negative deviations in the rainfall beyond 40 per cent between June 15 and August 15.

The rainfall distribution index exclusively takes care of distributional variations in rainfall and provides protection against deviations in ARI from NRI. The Agronomic optimum index provides unique protection considering agronomic ideal rainfall required for perfect crop. The requirement is converted to index by assigning weights to distribution of rainfall on the basis of water requirement. Catastrophe cover gives protection against severe shortfalls of 50 per cent beyond total seasonal rainfall during the insurance period. The premium for sum insured between Rs 10,000 and Rs. 15,000 range from Rs. 96 to Rs. 1,400 per hectare.

The AIC is taking all steps to popularise the scheme and create awareness through organising workshops at the district-level. As in the case of NAIS, the scheme would be operated in group approach through the banking network for smooth implementation. The coverage is available through existing network of banks and also through rural agents. The cultivators could fill the proposal form available in the banks and rural agents.

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