The working group on risk management in
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- 4. 9. Financial Support to Crop Insurance 4.9.1. Penetration Targets
| ‘Crop Insurance Pool’ should be created with obligatory participation depending on financial strength. An insurer can take facultative share of business over & above the obligatory level, subject to approved and agreed methods of allocation. The Program and the Pool can be managed by AIC, who would also participate to the extent of 50% of the program. Alternatively, an independent agency can be constituted to maintain the pool and seek reinsurance protection. 4. 9. Financial Support to Crop Insurance 4.9.1. Penetration Targets As discussed in the previous chapters, the National Agricultural Insurance Scheme (NAIS) has certain shortcomings, leading to poor penetration. The scheme, which is compulsory for loanee farmers, could cover about only rd of the potential crop loans eligible for coverage. In all, the scheme could cover only about 15 % of farmers / cropped area in the country (refer to Table - 11). It is an irony, that the scheme with nearly 75 % subsidy, could hardly attract 1/7th of the farmers. If a crop insurance program, is to be accepted as an important tool in crop risk management, the level of penetration will have to be atleast 50 %. In other words, the present level of acceptance of crop insurance will have to grow at least threefold. This kind of penetration can only come with improvements in the scheme, which are suggested in the earlier chapters of this Report. The State-wise comparison of farmers covered and acreage insured under NAIS (with total farmers and acreage (1995-96) is presented in Table, to understand the level of penetration in various states. The scheme during 2003-04 despite being largely comprehensive, could cover only 14.47 of all cultivators and only 16.99 of area (Table. Only Andhra Pradesh, Gujarat, Maharashtra, Orissa, Madhya Pradesh and Rajasthan, have decent levels of crop insurance protection, while other State lag far behind. Download 0.68 Mb. Share with your friends:
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