2. What is Insurance ?
• Insurance is a tool to protect you against a small
probability of a large unexpected loss. It is a
technique of providing people a means to transfer
and share risk where losses suffered by few are
met from the funds accumulated through small
contributions made by many who are exposed to
similar risks. Insurance is not a tool to make
money but a tool to help compensate an
individual or business for unexpected losses that
might otherwise cause a financial disaster.
3. What is Crop Insurance ?
• Crop insurance is a means of protecting
the agriculturist against financial losses
due to uncertainties that may arise from
crop failures/losses arising from named
or all unforeseen perils beyond their
control.
4. NATURE OF CROP INSURANCE
• It is risk management
tool
• It is security cover
• Based on productivity
• Compensation against
loss
• It is financing
instrument
• It is productive
• It protects food
production
5. Objectives of crop insurance
• Reduction in crop yield
risk
• Protection against loss
of revenue
• Protection against price
declining
• Increase in return of
farmers
• Increase in saving
• Promotion of
agricultural activities
• Increase in agriculture
produces
• To provide security of
investment
6. Need or importance of crop insurance
• Reduction in losses
• Compensation for losses
• Risk cover
• Improves financial
position
• It is supportive device
• Increase in morale &
productivity
• It creates business
opportunities
• Relationship between
corporate sector &
farmers
• Rural development
• Reduction in poverty
• Reduction in farmers
suicides
• Security cover against
disasters
• Reduction in rural
indebtedness
7. Types of Crop Insurance
1. MPCI:stands for multiple peril crop
insurance. This is a type of crop insurance
that is designed to cover the crops against
several different types of loss. This type of
coverage will protect the farmer against any
weather-related losses, such as a tornado or a
hail storm. In addition, this policy covers
things like low yields, late planting, prevented
planting and replanting costs.
8. Contd
APH
• This term stands for actual production history. This type of insurance
is based on the production history of a farm, over a certain number of
years. In most cases, a policy will base the actual production history on
a period of somewhere between four and 10 years. The average
production will be calculated over that time period, and then a certain
percentage of the yield will be paid if a loss occurs.
• This type of policy provides coverage for a wide variety of perils. For
example, the farmer could file a claim due to drought, wind damage,
hail, frost, insects, disease or excessive moisture. If the yield of a crop
is less than the predetermined covered amount, the farmer will receive
a check for the difference between the two percentages. This is the most
common type of crop insurance that is available in the market today. It
has been used in the farming industry for many years.
9. Contd
3. GRP
• GRP stands for group risk plan. This is a type of crop
insurance that is based on the yield of a group of
farmers from a particular county. This is not a type of
policy that is based on an individual farmers yield, like
APH. With this type of policy, you could be paid for an
insurance settlement regardless of the actual yield of
your farm. Your farm could do fine, but if the average
yield of the entire county decreased below a certain
amount, you could still receive a payment. This type of
coverage allows you to choose the yield level that you
want to be covered against, when calculated with the
average of all of the farms in the county.
10. Contd
4. CRC
• CRC is a term that stands for crop revenue coverage.
Instead of being based only on the yield of the farm,
this coverage is based on the total amount of revenue
that is generated from a crop. With this type of
coverage, you will also get protection against drops in
prices for the crop instead of just protection against
losses. This is a comprehensive type of coverage that is
designed to look at the bottom line instead of only
looking at how much you were able to harvest from a
particular farm for the year.
11. Crop insurance in Haryana
• PSSCI stands for Pilot Scheme on Seed Crop Insurance
(India)= 1999-2000
• National agricultural insurance scheme (NAIS)
• OBJECTIVES: The objectives of the NAIS are as
under:- 1. To provide insurance coverage and financial
support to the farmers in the event of failure of any of
the notified crop as a result of natural calamities, pests
& diseases.
• 2. To encourage the farmers to adopt progressive
farming practices, high value in-puts and higher
technology in Agriculture.
• 3. To help stabilise farm incomes, particularly in
disaster years
12. • PREMIUM SUBSIDY:
• 50% subsidy in premium is allowed in respect
of Small & Marginal farmers, to be shared
equally by the Government of India and
State/UT Govt.
13. Modified National Agricultural
Insurance Scheme:
• It was prepared which has been approved for
implementation on pilot basis in 50 districts
during the remaining period of 11th Plan from
Rabi 2010-11.
• The salient improvements made in MNAIS (over
NAIS) are as under: Actuarial premium with
subsidy in premium ranging upto 75% to all
farmers;
• Only upfront premium subsidy is shared by the
Central and State Government on 50:50 basis and
all claims liability is on the insurance Company.
14. Weather Based Crop Insurance Scheme
(WBCIS)
•
Weather Based Crop Insurance Scheme
(WBCIS) aims to mitigate the hardship of the
insured farmers against the likelihood of
financial loss on account of anticipated crop
loss resulting from adverse weather conditions
relating to rainfall, temperature, wind,
humidity etc.
15. Pradhan Mantri Fasal Bima Yojana
(PMFBY)
• The Maximum Premium payable by the
farmers will be 2% for all Kharif Food &
Oilseeds crops, 1.5% for Rabi Food &
Oilseeds crops and 5% for Annual
Commercial/Horticultural Crops.
• The difference between premium and the rate
of Insurance charges payable by farmers shall
be shared equally by the Centre and State.
16. problems/ challenges/obstacles
• Lack of awareness
• Difficulty in claim settlement
• Burden of premium
• No coverage in remote areas
• Lack of culture of crop insurance
• Dependence on money lenders
• Lack of grievance redressal system
17. Suggestive measures for crop insurance
• Subsidy by the government to small farmers
• Publicity
• Incentive oriented insurance plans
• Settlement procedure should be made effective
• Implementation in remote areas.
• Awareness camp for farmers
• Target on small and marginal farmers
• Increase in coverage
• Grievance redressal system
