Crop Insurance Schemes

Origin of Crop Insurance Scheme

Year remarks
1948 desire to introduce two pilot schemes viz; crop insurance scheme and
cattle insurance scheme. But none of the state government agreed to
implement due to paucity of funds.

1970 Expert committee on crop insurance (chairman-Dharamnarain) was

appointed to examine and analyse financial implication of scheme to
introduce it. His report ruled out the possibility of implementation in
India. Contrary to this report Prof. Dandekar defended its
implementation.

1973 GOI had set up General Insurance Company (GIC) to carry out all
types of insurance.
GIC first introduced the crop insurance scheme in selected centre of
Gujarat (only H4 cotton).
Later same was extended to West Bengal, Tamil Nadu, and Andhra
Pradesh for cotton crop till 1979.
 Year Scheme
1979 Area based crop insurance scheme by GIC in selected areas.
provide insurance cover against a deficit in crop yield below the threshold
level.
The Scheme covered cereals, millets, oilseeds, cotton, potato and
chickpea and it was confined to loanee farmers of institutional sources
on a voluntary basis.

1985 Comprehensive Crop Insurance Scheme (CCIS) was introduced by

GIC in all the states.
Covers all (compulsory)the farmers availing loans.
Limited to cereals such as rice and wheat, millets, oilseeds and pulses.
Premium- 2 percent of sum insured for rice, wheat and millet
1 per cent for oilseed and pulses
Sum insured is 150 per cent of the crop loan.

Indemnity =(Shortfall in the yield of crop/Threshold yield of crop) *

Sum insured
Advantages of CCIS
1. It stabilizes the farm business during the period of crop failure.

2. The farmers can act much more confidently as there is protection

against hazards of farming.

3. It prevents the farmers to approach non-institutional agencies during

the periods of crop failure.

4. It enhances the use of modern inputs to boost the productivity and

5. In high risk areas crop insurance serves as a catalyst in bringing areas

under cultivation which otherwise would have remained
uncultivated.
Drawbacks of CCIS
1. It provides coverage only to a limited number of crops-
wheat, paddy, oilseeds, millets and pulses excluding
important crops such as sugarcane, potato, cotton etc.

2. The coverage is restricted to rainfed crops only and

because of this, the scheme was not effective to the states
such as Punjab, Haryana and Western U.P.

3. The scheme covers only those farmers who had taken

loans from financial institutions and the sum insured was
limited to a maximum of Rs. 10,000 only.
National Agricultural Insurance Scheme (NAIS)
Launched by prime minister on 23-06-1999 and implemented
by the Agriculture Insurance Company of India Ltd. (AIC).

Provide insurance facilities to all farmers (loanee or non

loanee) irrespective of size of the holdings.

The main objective of the Scheme was to protect the farmers

against the crop losses suffered on account of natural
calamities, such as, drought, flood, hailstorm, cyclone, pests
and diseases.

Cover all crops including coarse crops, pulses, oilseeds and

three cash crops viz; sugarcane, potato and cotton.

Applicable all over the country.

 Year Scheme
2007 With the objective to bring more farmers under the fold of Crop
Insurance, a Pilot Weather Based Crop Insurance Scheme
(WBCIS) was launched in 20 States in 2007.
some private companies have also been allowed to implement the
Scheme.
adverse weather incidences, such as deficit and excess rainfall, high
or low temperature, humidity etc.
2010-11 To improve further and make the NAIS easier and more farmer
friendly, a proposal on Modified National Agricultural
Insurance Scheme (MNAIS) was prepared and approved by
Government of India for implementation on pilot basis in 50
districts from Rabi 2010-11 season

2009-10 and The Coconut Palm Insurance Scheme (CPIS) was approved for
2010-11 implementation on pilot basis for the years 2009-10 and 2010-11 in
the selected areas of Andhra Pradesh, Goa, Karnataka, Kerala,
Maharashtra, Odisha and Tamil Nadu.
 Year Scheme

Later on, it was extended to West Bengal also.

Fifty percent of the premium is contributed by Government of

India, 25 percent by the concerned State Government and the
remaining 25 percent by the farmer.

2013-14 To make the Crop Insurance Schemes more farmer friendly, a

restructured Central Sector Scheme in the name of ‘National Crop
Insurance Programme’ (NCIP) was introduced from Rabi 2013-
14.

The existing MNAIS, WBCIS and CPIS were merged under this
programme with various improvements.
Pradhan Mantri Fasal Bima Yojana
Launched by GOI in 2016.

Covers localised crop losses like hailstorm, inundation.

Coverage of post harvest losses

Lower premium rate as compared to previous scheme- 2 %

for kharif crop, 1.5 % for rabi and for annual horticultural
crop it is 5 %

Compulsoy for Loanee farmers

Risks to be covered
1. Yield losses- a) natural fire
b) storm, cyclone
c) flood, inundation
d) drought, and pests and diseases

2. Prevented sowing- due to adverse weather condition

3. Post harvest losses- up to 14 days

4. Localised calamities- hailstorm, inundation