Lok Sabha Question No. 1801 (UNSTARRED), answered on 2016-03-08
Subject: Insurance Mechanism
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: B.N. CHANDRAPPA, NALIN KUMAR KATEEL, DODDAALAHALLI KEMPEGOWDA SURESH

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA

## UNSTARRED QUESTION NO.1801 TO BE ANSWERED ON THE  8 TH  MARCH, 2016

## INSURANCE MECHANISM

1801.  SHRI B.N. CHANDRAPPA: SHRI NALIN KUMAR KATEEL: SHRI D.K. SURESH:

Will the Minister of AGRICULTURE AND FARMERS WELFARE ‡ãðŠãäÓã एवं किसान िल्याण ½ãâ¨ããè be pleased to state:

- (a) whether the Government has taken note that there is no mechanism put in place to provide adequate insurance and compensation to farmers in case of crop failure due to natural calamities;
- (b) if so, the details thereof;
- (c) whether the  Government  is  aware  that  there  is  an  urgent  need  to  introduce  a better compensation and insurance mechanism to provide calamity and disaster relief to retain farmers in the profession of agriculture; and
- (d) if so, the corrective steps taken by the Government in this regard?

## ANSWER

MINISTER OF  STATE IN THE  MINISTRY OF  AGRICULTURE AND  FARMERS  WELFARE

‡ãðŠãäÓã एवं किसान िल्याण ½ãâ¨ããÊã¾ã ½ãñâ Àã·¾ã ½ãâ¨ããè (DR. SANJEEV KUMAR BALYAN)

(a) to (d): Mechanism to provide assistance/ relief/ claims to farmers in case of crop failure  due  to  natural  calamities  already  exists.    State  Governments  have  ready availability of funds in their State Disaster Response Fund (SDRF) which is shared by the Central and concerned State Government in the ratio of 75: 25 for General Category States  &  90:10  for  11  Special  Category  States  viz.  Jammu  &  Kashmir,  Himachal Pradesh,  Uttarakhand,  Arunachal  Pradesh,  Assam,  Manipur,  Meghalaya,  Mizoram, Nagaland, Sikkim and Tripura for relief measures due to natural calamities like drought, hailstorm, pest attack etc. The Government of India extends financial, logistic and other support.    Additional  assistance,  over  and  above  the  SDRF,  is  considered    from  the National  Disaster  Response  Fund  (NDRF)  for  natural  calamities  of  severe  nature  in accordance with the established procedure and keeping in view the  items and norms for assistance.  Distribution of relief to the farmers is undertaken by the State.

In  addition,  to  provide  comprehensive  risk  coverage  against  crop  loss  due  to natural  calamities,  pests  &  diseases  and  adverse  weather  conditions  in  respect  of notified  crops in  notified  areas,  crop  insurance schemes viz. National Crop Insurance Programme (NCIP) with  its three components namely, (i) Modified National Agricultural Insurance  Scheme  (MNAIS),  Weather  Based  Crop  Insurance  Scheme  (WBCIS)  & Coconut  Palm  Insurance  Scheme  (CPIS)  and  the  National  Agricultural  Insurance Scheme are being implemented.    Claims under these schemes are worked out and paid as per provisions of the respective schemes.

To  make  the  assistance  process  farmer  friendly,  Government  has  recently revised the items and norms of assistance under SDRF and NDRF for natural disasters. In  the  revised  norms,  the  assistance  amount  to  farmers  has  been  enhanced  by  50% and crop loss area of 33% & above has been made eligible for giving assistance under SDRF/NDRF.   Similarly, after detailed discussions with stakeholders, Government has recently approved a new crop insurance scheme namely, Pradhan Mantri Fasal Bima Yojana (PMFBY) for implementation in the Country from Kharif 2016 season.   PMFBY is a marked improvement over the earlier schemes on several counts and provides for comprehensive  risk  coverage  from  pre-sowing  to  post-harvest  losses.  The  salient features of PMFBY are annexed .

Premium rates payable by farmers, selection of insurance company & administrative  and  operational  structure  of  Weather  Based  Crop  Insurance  Scheme (WBCIS) have also been rationalized and brought at par with PMFBY.

## Salient Features of PMFBY

- i) Provide  comprehensive  insurance  coverage  against  crop  loss  on  account  of  non-preventable natural  risks,  thus  helping  in  stabilising  the  income  of  the  farmers  and  encourage  them  for adoption of innovative practices.
2. ii) Increase the risks coverage of Crop cycle - pre-sowing to post-harvest losses.
3. iii) Area approach for settlement of claims for widespread damage. Notified Insurance unit has been reduced to Village/Village Panchayat  for major crops
4. iv) Uniform maximum premium of only 2%, 1.5% and 5% to be paid by farmers for all Kharif crops, Rabi Crops and Commercial/ horticultural crops respectively.
- v) The difference between premium and the rate of Insurance charges payable by farmers shall be shared equally by the Centre and State.
6. vi) Uniform seasonality discipline & Sum Insured  for both loanee & non-loanee farmers
7. vii) Removal of provision of capping on premium and reduction of sum insured to facilitate farmers to get claim against full sum insured without any reduction.
8. viii) Inundation has been incorporated as  a localized calamity in addition to hailstorm and landslide for individual farm level assessment.
9. ix) Provision  of  individual  farm  level  assessment  for  Post  harvest  losses  against  the  cyclone  & unseasonal rains for the crops kept in the field to dry upto a period of 14 days, throughout  the country.
- x) Provision of claims upto 25% of sum insured for prevented sowing.
11. xi) 'On-account' payment upto 25% of sum insured for mid season adversity, if the crop damage is reported more than 50%.  Remaining claims based on Crop Cutting Experiments (CCEs) data.
12. xii) For more effective implementation, a cluster approach will be adopted under which a group of districts with variable risk profile will be allotted to an insurance company through bidding for a longer duration upto 3 years.
13. xiii) Use of Remote Sensing Technology, Smartphones & Drones for quick estimation of crop losses to ensure early settlement of claims.
14. xiv) Crop  Insurance  Portal  has  been  launched.   This  will  be  used  extensively  for  ensuring  better administration, co-ordination, transparency and dissemination of information.
15. xv) Focused  attention  on  increasing  awareness  about  the  schemes  among  all  stakeholders  and appropriate provisioning of resources for the same.
16. xvi) The claim amount will be credited electronically to the individual farmer's Bank Account
17. xvii) Adequate publicity in  all the villages of the notified districts/ areas
18. xviii)  Premium  rates  under  Weather  Based  Crop  Insurance  Scheme  (WBCIS)  have  also  been reduced and brought at par with new scheme. Further, capping on Actuarial premium and reduction in sum insured has been removed in this scheme also.

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