NEW DELHI: The Centre has decided to replace the current National Agriculture Insurance Scheme with a Modified National Agricultural Insurance Scheme. A Joint Group set up under the Ministry of Agriculture has proposed insurance cover to farmers not only for major crops but also for personal accident, dwelling and livestock with panchayat as a unit. This is the first time that considerations other than notified crops, will be taken on board for farmers.

Two kinds of coverage

According to well-placed sources, there would be two categories of coverage of farmers. The compulsory category would comprise farmers who take institutional loans. The other would be the voluntary category in which all farmers — both loanee and non-loanee (who grow notified crops) — would be allowed to participate on a voluntary basis.

Financial implication

The scheme with a financial implication of over Rs. 4000 crore for 100 per cent coverage of farmers of all categories, is under consideration of the Planning Commission. Premium will be worked out on an actuarial basis. There will be a subsidy on premium to be picked up by the Centre and States on a 50:50 basis. For 2006-07, about 25 per cent coverage (about three crore farmers) has been worked out with about Rs. 1500-crore implication.

The new scheme may also take into consideration pre-sowing losses or limited coverage of losses from climate change, post-harvest damage, and localised reasons such as hail or frost. A separate coverage scheme might be worked out for fruits and vegetables on which there is a lot of focus under the recently launched National Horticulture Mission. Of the nearly 175 insurable crops in kharif of 2006-07 and 135 crops in rabi, 20 per cent crops on kharif and 55 per cent in rabi will be placed under compulsory coverage. The rest will be in voluntary category.

Categorisation of crops

The crops in different States will be categorised on the basis of net premium to be paid by farmers. Farmers growing insurable crops with net premium (after subsidy) up to four per cent are likely to be included under the compulsory category. The farmers cultivating crops with net premium payable above four per cent will be considered as `voluntary.' The proposed scheme will be based on "actuarial regime'' requiring the Government to pay premium subsidy only.

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