Crop insurnace
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  • 1. • PRESENTED BY: AZAR SHAIKH 99  ARJUN SHARMA 101  VIKRAM SHEDGE 102  JANHAVI SHINDE 103  VIKRAM SHINDE 104  VAISHALI SHIRSAT 106  DURGESH SHIVADE 107  JAYPAL SIRSAT 108  MAHESH SOLASE 109
  • 2. • Definition:Crop insurance refers to an insurance which insures farmers and crop producers against the their loss of crops due to natural disasters, such as hail drought, and floods.
  • 3. • Yield risk:• • • • Weather Pest & disease Fire Inputs quality • price risk :• Influenced by demand & supply factors
  • 4. • • • • To stabilize farm income & investment. To guard against disastrous effect of crop losses. Helps to farmers to initiate production activity. Farmers can grow more profitable crops under certain risks. • farmers can adopt improved technologies for increasing crop production. • condition of farmers becomes unstable due to natural calamities & price fluctuation.
  • 5. First Individual Approach Scheme • introduced in 1972-73 by general insurance corporation (GIC) • crop covered:• Initially only cotton H-4 • later ground nut, Wheat, Potato • States covered:• Andra pradesh, Gujrat, Karnataka, Maharashtr a, Tamilnadu, West Bengal. • Farmers covered- 3110 • premium – 4.54 lakh • Claims – 37.88 lakh
  • 6. • Launched by GIC in 1984 • V. M. dandekar suggested suitable approach to be followed in the schemes. • It provides insurance cover against a decline in crop yield below threshold level. • Based on “Area approach” • Crops covered:- Cereals, Millets, Oilseeds, Cotton, Potato & Chickpea.
  • 7. Contd. • only to loanee farmers on voluntory basis • States covered :- 12 states covered such as Andra pradesh, Maharashtra, Gujrat, etc. • farmers covered:- 6.23 lakh • premium collected:- 195.01 lakh • claims paid:- 155.68 lakh • claim ratio:- 79.83% • premium paid was shared between GIC & state govt. in ratio of 2:1
  • 8. Contd. Lacking of scheme: Small & marginal farmers couldnot participate because farmers have poor access to institutional credit.  Unit of insurance was very large  Lack of awareness among farmers  Major commercial crops like Cotton & sugarcane excluded.
  • 9. Comprehensive Crop Insurance Scheme (CCIS) • this scheme implmented in 1985-1999 • This scheme linked to short term credit • Implemented based on homogenous area approach. • CCIS was confined only to farmers who borrowed seasonal agril. Loan • CCIS was compulsory for loanee farmers. • Till kharif 1999, scheme adopted in 15 states & 2 UT’s
  • 10. Contd. • Salient features:– it covers farmers availing crop loans from financial institutions, for growing food crops & oilseeds. – the coverage was restricted to 100% of crop loan subject to maximum of rs. 10000 per farmers – Premium rates:- 2% for cereals 7 millets 1% for pulses &oilseeds Farmers shares of premium was collected at the time of disbursement of loan
  • 11. Contd. • Burden of Premium and Claims was shared by Central and State Governments in a 2:1 ratio. • Farmers covered:- 763lakh • Premium collected-404 crores • claims paid-2303crores. • CCIS were highly skewed towards Gujrat about (58%) to groundnut farmers. • Subsidy to small & marginal farmers 50% of premium
  • 12. Lackings of the CCIS • The scheme covers only loanee farmers, leaving non-loanee farmers who are in majority. • Covers only food crops, oilseeds and pulses and other crops are left out. • Sum insured was maximum to Rs 10,000 • High claims ratio because of low, flat premium rates.
  • 13. Experimental Crop Insurance Scheme(ECIS) • This scheme introduced in Rabi 1997-98 • Covers small & marginal farmers those who not borrow from institutional institutes • Implemented in 14 districts of 5 states • 100% subsidy provided on premium • Premium & claims were shared by central & state govt. in 4:1 ratio
  • 14. Contd. • Farmers covered- 4.78 lakh for sum insured 172 crore • Claims paid- 39.78 crore • Premium collected- 2.86 crore • This scheme discontinued after one season
  • 15. • Scheme introduced from rabi season of 1999-2000 • Scheme for both loanees & non-loanees farmers • Scheme operating on both “Area approach” & “Individual approach” • Crops covered:- Food grains, Oilseeds, annual horticulture/ commercial crops. • Premium rates:• • • • • Bajara & oilseeds - 3.5% Kharif crops -2.5% Wheat - 1.5% Other rabi crop -2.0% In case of horticultural/ commercial crops, actuarial rates are being charged.
  • 16. Contd. • Small and marginal farmers are entitled to a subsidy of 50 per cent of the premium charged from them, which will be shared 50:50 by the central and state governments. • As against a limit of sum insured Rs 10,000 , sum insured can be as high as 150 percent of average yield. • The premium subsidy will be phased out over a period of five years. • NAIS is a multi agency scheme. • Central Govt, State Govt, Financial Institution and GIC will play their roles in implementation.
  • 17. Contd. • Coverage of NAIS:» Initially introduced in 9 states & UT’s covered 5.8 lakh farmers & 7.8 Lakh ha. Cropped area » Upto 2006-07, scheme covers 21 states & UT’s » Total farmers covered- 970.8 lakhs » Total sum assured- 97183 crore » Total premiums collected- 2944 crore » Total claims paid- 9857 crore
  • 18. • This scheme introduced by govt. of India a central sector scheme as PSSCI in 1999-2000. • This is the first scheme which provides security to seed growers • This scheme covers the Breeders Seed and Certified seed of all major crops in 10 states • It covers Wheat, Paddy, Maize, Bajari, Jowar, Gram, Red gram, Groundnut, Soybean, Sunflower and Cotton • PSSCI covers the seed crop at field stage, arising out of failure, rejection of seed crop, loss in expected raw seed , loss of seed crop after the harvest
  • 19. Contd. • Covers loss in germination • Loss in certification stage. • Also covers non preventable risk like flood, drought, cyclone etc. • The sum insured is equivalent to 3 or 5 years average seed yield multiplied by procurement price/sale price of seed crop. • premium rates:» 2.0% for Ground nut and Wheat » 2.5% for Sunflower » 3.0% for paddy » 3.5% for Jowar » 5.0% for Gram, Redgram, Bajara, Maize, Soybean & cotton
  • 20. • This scheme introduced in Rabi 2003-04 • Scheme implemented in 21 districts of 13 states. • A farmers production and price risk for the crop produced by him, would be protected by ensuring minimum guaranteed income. • Initially the programme cover paddy and wheat only. • A premium subsidy of 75% is proposed to be given in case of small and marginal farmers and 50% for other farmers. • Upto 2004 total farmers covered under this scheme were 27329.
  • 21. • This scheme introduced in kharif 2007 • This scheme covers risk of weather related issues like rainfall, frost, heat, humidity, etc. • WBCIS is built upon the weather conditions affect crop production even when cultivar has taken all the care to ensure good harvest. • This scheme run by different private institutions in different states • It covers small & marginal farmers • This scheme compulsory for loanee farmers & voluntary for non-loanee farmers
  • 22. Contd. • Crops covered:-millets, pulses, oilseeds & horticultural crops. • States covered- Bihar, Chhattisgarh, Haryana, M.P, Punjab, Rajsthan & U.P. • Premium rates:• Wheat- 1.5% • Other crops- 2.0% • Horticultural crops- Actuarial rates
  • 23. • The market for crop insurance in developing is vast as acerage under cultivation. • Crop insurance will vary from country to country depending upon national priorities & the objectives set & the limitations imposed under crop insurance scheme.