Agriculture credit and insurance news

The interest subvention scheme is being implemented by the Government since 2006-07 to make short-term crop loans upto Rs. 3 lakh for a period of one year available to farmers at the interest rate of 7 % per annum. The Government has since 2009-10 been providing additional interest subvention to prompt those farmers who repay their loan in time. The additional subvention was 1% in 2009-10 and 2% in 2010-11. This has been increased to 3% in 2011-12.

The Cabinet Committee on Economic Affairs today approved the Modified National Agricultural Insurance Scheme (MNAIS). The modified NAIS has been formulated, incorporating the necessary changes/modifications in consultation with States to remove the deficiencies and make it more comprehensive and farmer friendly.

The Scheme will be implemented as a Central Sector Scheme on a pilot basis in 50 districts in last two years of 11th Five Year Plan starting from the Rabi season of 2010-11. Approval has also been accorded for making budgetary provisions of ` 358 crore for the Modified NAIS for the years 2010-11 and 2011-12.

 With the introduction of the modified scheme, it is expected that an increased number of farmers will be able to manage risk in agriculture production in a better way and will succeed in stabilizing farm income particularly at the times of crop failure on account of natural calamities.

 Keeping in view the various risks involved in agriculture production, the Ministry of Agriculture has been implementing the National Agricultural Insurance Scheme (NAIS) as a Central Sector Scheme since Rabi season 1999-2000 to insure the farming community against these risks. It was reviewed based on the experience gained from its implementation, in which many deficiencies in the scheme were identified.

The approved scheme has the following features:

(i)                  Actuarial premiums will be paid for insuring the crops, hence the claims liability would be on the insurer;

(ii)                The unit area of insurance for major crops is village panchayat;

(iii)               Indemnity amount shall be payable for prevented sowing/planting risk and for post harvest losses due to cyclone;

(iv)              On account payment up to 25% of likely claims would be released as advance for providing immediate relief to farmers;

(v)                Uniform seasonality discipline for loanee and non-loanee farmers;

(vi)              More proficient basis for calculation of threshold yield and minimum indemnity level of 70% instead of 60%;

(vii)             Modified NAIS with improved features will have two components i.e. compulsory and voluntary. Loanee farmers will be insured under ‘compulsory category’ while non-loanee farmers will be insured under ‘voluntary category’;

(viii)           Private sector insurers with adequate infrastructure and experience would also be allowed in the implementation of MNAIS.

The Government had conveyed the approval for implementation of the Coffee Debt Relief Package 2010 for the debt ridden small coffee growers, with a total financial implication of Rs. 241.33 crore. In total 78,665 loanee loan account having accumulated bank loans would be covered under the package of which 74,929 (95%) are small coffee growers who will get the benefit of both waiver and rescheduling of balance amount and the remaining 3736 ( 5%) accounts of medium and large growers will get the benefit of rescheduling of loans. The implementation of the package is under progress.

Coffee Rainfall Insurance offers protection against the weather risk. The rainfall insurance scheme so far covered only deficit blossom / backing showers and heavy rains during the monsoon period. The scheme has now been expanded to cover the losses which occur due to un-seasonal rains during the harvesting period from November to February with a graded pay back depending on the intensity of these un-seasonal rains during the current year 2010-11. During 2010, for monsoon and post monsoon coverage, a total of 15790 coffee growers were covered with a total premium collection of about Rs. 2 crores, of which 50% would be the Government subsidy component. This is almost three times as compared to 5200 coffee growers covered during the whole of previous year.