Agriculture in India is fraught with risks like crop disease, pest attack, reduction in output, draughts and floods. Crop insurance will go a long way in mitigating the risk. However, several schemes have been launched and discontinued due to extreme risk factors and huge loss to insurance companies. However, the Government introduced ?National Agricultural Insurance Scheme? (NAIS) in 1999-2000 by Agriculture Insurance Corporation of India. It covers all food crops (cereals and pulses), oilseeds, horticultural and commercial crops. It covers all farmers, both loanees and non-loanees, under the scheme. The premium rates vary from 1.5 percent to 3.5 percent of sum assured for food crops. In the case of horticultural and commercial crops, actuarial rates are charged. There is a 50% subsidy pr
IRDAI has permitted micro-insurance agents to solicit and market crop insurance schemes like Pradhan Mantri Fasal Bima Yojana (PMFBY).
It is for some time that IRDA has been receiving request from some stakeholders to categorise government-sponsored crop insurance schemes as micro-insurance products irrespective of the amount of sum insured under the individual policy. Under IRDAI (Micro Insurance) Regulations 2015, the maximum amount of cover for crop insurance is fixed at Rs 1 lakh per cover. Now, micro insurance agents can sell to the non-loanee farmers the (three) government sponsored crop insurance schemes offered by an insurer which covers the crop of the policyholder, over the area of the insured field. However, the sum insured/premium/premium rate per crop/ unit area/tree, as the
Pradhan Mantri Fasal Bima Yojana, touted as one of the most farmer-friendly crop insurance schemes of independent India has some opposition from fertile Punjab region. With more advanced agriculture sector with more mechanization and canal fed irrigation and increased power subsidy, agriculture in Punjab is different from rain fed agriculture of other state. The current insurance scheme provides an indemnity level of 90 per cent. In Punjab, the average loss of major crops, wheat and paddy, is between two per cent and three per cent. So Punjab farmers will not benefit from this scheme and has request the indemnity level be raised to 95 per cent.
Further, with increased mechanization, the crops are harvested immediately and transport in a short time and hence the farmers have requested in