The working group on risk management in
(g) Uniform seasonality discipline for participation in the scheme
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| (g) Uniform seasonality discipline for participation in the scheme: The Working Group was in agreement with the Joint Group, w.r.t. uniform cutoff dates / sign-up dates, for loanee and non-loanee farmers. These cutoff dates could be between 15 th June – 15 th July for Kharif crops indifferent states 30 th November - st December for Rabi and st January for Summer crops. In case of Kharif crops, the cutoff dates are to be fixed in such away, that these dates correspond to historical onset / covering by SW Monsoon. The Working Group further agreed with the Joint Group w.r.t. the following modalities: 1. Non-loanee farmers can avail insurance before sowing, on the basis of the crop which the farmer intends to sow. In case of change in the crop or other exigencies, the farmer should communicate to the Bank / institution, where the proposal was submitted originally, accompanied by a certificate of sowing of the alternate crop from the village administration. For loanee farmers, coverage be provided on the basis of the loan amount sanctioned Maximum Borrowing Limit (MBL), by the credit agency. The basis of sanction of the loan is the total landholding, the nature of crops grown and the scale of finance. The Working Group strongly felt that this is a very important suggestion, to minimize inter- temporal adverse selection problems (i.e. farmers buy insurance only when they may face large crop yield losses. What may also be considered, is to charge differential premia, for different sign up dates. Download 0.68 Mb. Share with your friends:
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