October 7, 2022
National Agricultural Insurance Scheme

National Agricultural Insurance Scheme

National Agricultural Insurance Scheme was launch on January 1, 1993. And is the first comprehensive agricultural insurance cover in India. India has one of the largest agricultural production systems in the world. It feeds not just Indian cities but also its vast rural population. These networks of farmlands are spread across an area six times larger than Britain and every year, it produces enough grains to feed over a billion people! Since agriculture is so important to India’s economy.

What is a national agricultural insurance scheme?

The National Agricultural Insurance Scheme (NAIS) was launch on January 1, 1993. And is the first comprehensive agricultural insurance cover in India. It is also the largest social security program of its kind in the world. The scheme covers over 35 million farmers who are growing crops valued at Rs.43,400 crore (US$7.46 billion). 1,38,000 agents are in place to serve the entire country, from Kashmir to Kanyakumari. The scheme’s approach is multifaceted—it works to reduce revenue losses through risks like drought and flood or crop damage by pests and disease and also helps coastal farmers prepare better to manage the vagaries of natural hazards like cyclones.

The National Agricultural Insurance Scheme provides insurance cover against four types of risks. First, crop losses due to natural disasters like drought and flood. Second, is crop damage due to the rising incidence of both pests and diseases. Third, crop damage due to spoilage or contamination by plant pathogens like mildew, rot, or vine borer. Fourth, crop loss due to subnormal yields.

The premium for participating farmers is Rs 5 per kg of produce grown in a year (US$0.10).

Different types of policies

There are several types of policies. The following provide protection against crop losses:

Revenue protection is a scheme under which farmers are reimbursed for the loss of revenue incurred due to natural disasters, pests, and diseases, etc. providing crop insurance to farmers

The National Agricultural Insurance Scheme policy is valid for two years from the date of issue and covers the following losses:

National Agricultural Insurance Scheme

The premium for this policy is Rs. five per kg of produce grown in a year or Rs. 5 per acre (Rs. 2,500 per bigha). This is a scheme under which farmers are reimbursed for the loss of revenue incurred due to natural disasters, pests, diseases, etc. And crop damage due to subnormal yields provided the policy is issued within two years of planting.

National Agricultural Insurance Scheme is a policy for which the premium is Rs. five per kg of produce grow in a year and the policy becomes invalid on crop failure. This policy can be availed from any agent who is registered with the Agricultural Insurance Company of India Limited (AICIL), Regional Offices, All India Agencies, or by calling toll-free number 18000111111 from nationalized numbers.

This scheme provides protection against crop loss through a maximum annual payout of Rs. 5 lakh on the sum insured of Rs. 20,000 to Rs.2 lakh (excluding the sum assured). The maximum support price has fix at Rs. 12,000 per quintal of rice and the premium is fix at Rs. 10 per acre (Rs. 5 per bigha) or Rs. 5 per quintal subject to a minimum of Rs. 25 and a maximum of Rs 2,500 subject to a minimum cover of five quintals/acre (two bighas/bigha).

Benefits of national agricultural insurance scheme

A number of benefits accrue to the farmers through the scheme. The scheme has been providing relief to farmers since 1994. This has been done through:

These benefits have been enhance several times. And the amount of relief provides today amounts to over Rs 1,700 crores. From fiscal year (FY) 2011-2012, the scheme will extend beyond its initial objective of 25 years.

The National Agricultural Insurance Scheme covers 90% of agricultural households in India and currently benefits more than 35 million farmers. In 2011, the scheme distributed a total of Rs. 1,757 crores (US$326 million) in relief for over 7,000 incidents of crop damage due to natural disasters, pests, diseases, etc. The top five states that benefited were Andhra Pradesh (Rs 563 crore), followed by Karnataka (Rs 401 crore), Tamil Nadu (Rs 173 crore), Rajasthan (Rs 153 crore), and West Bengal (Rs 143 crore).

The NDRF has also started providing Rs. 4,000 crore (US$750 million) in advance payments to help farmers manage their crops in 2012.

The enactment of the Act has paved the way for providing agricultural insurance cover to the farming community against the perils of drought, crop failure due to natural calamities, and crop damage due to pests and diseases. The Act provides for levy and collection of contributions from farmers while it is the Central government that is liable to provide relief in case of any loss suffered by them.

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