Farm insurance not on govt’s mind despite loss

Ruchika M. Khanna

Tribune News Service

Chandigarh, April 19

Punjab and Haryana claim to have suffered massive crop damage due to inclement weather. While both agrarian states are demanding compensation worth hundreds of crores from the Centre, but none of these took up the issue of crop insurance scheme.

The Centre offers two schemes – National Agriculture Insurance Scheme and the National Crop Insurance Programme (this includes weather-based crop insurance and modified national crop insurance). However, ever since these schemes have been launched, Punjab has failed to implement these. After a single block in Gurdaspur district (Kalanaur) was covered under the scheme on a pilot basis in 2008, the government never opted for these schemes. Sources in the insurance sector said there had been parleys between the Punjab government and insurance companies, including Agriculture Insurance Company of India, for launching these schemes, but to no avail. Government officials say Punjab wants a customised policy where the unit used to collect data of crop loss is not the entire village, but a certain area.

“Unlike other states where one village as a unit to assess loss is good because of small area of villages, Punjab has several big villages. If insurance companies are willing to offer a product where the unit to assess loss is a few acres, we will consider the scheme,” said a senior Agriculture Department official.

Interestingly, the neighbouring state of Haryana normally goes in for Modified National Agriculture Insurance Scheme (MNAIS) and Weather Based Crop Insurance Scheme (WBCIS). But it failed to notify these schemes for 2014 paddy and 2014-15 wheat crop.

Though officials in insurance companies maintain the new government overlooked the need for issuing a notification, government officials maintain that the real reason was that the Agriculture Department had raised objections about high premium being charged by the insurance companies and the low outflow or poor claim settlement ratio.

However, considering the huge losses suffered by farmers in Haryana, the government has started negotiations with the insurance companies to offer crop insurance to farmers in the next kharif season.

The sources say both states need to adopt the NAIS, where they have to pay just 2.5 per cent of sum insured as premium for paddy and 1.5 per cent for wheat. The sum assured for farmer is equivalent to the scale of finance (the crop loan that a farmer can get). Small and marginal farmers (having less than 5 acres) also get a subsidy on premium to be paid, with the Centre and state paying 10 per cent of the premium.