Farm insurance slips on coverage

Despite the Haryana government's National Agricultural Insurance Scheme (NAIS), introduced in the rabi season of 2005-06, out of 12 districts for mustard and six for gram, it is learnt that whatever insurance has been done so far is not more than 10-15 per cent of the total loan disbursed.

The insurance scheme is meant to cover eligible crop loans by financial institutions through a notification.

As per the information available, of the 162 nodal offices of the commercial banks, only six banks have participated. Out of 19 Central Commercial Banks, only six have participated and as for the Regional Rural Banks, only two have participated so far.

For mustard, the Agriculture Insurance Company of India Limited (AICL) has received information regarding insurance cover of loanee farmers from just seven districts against the 12 districts while it is just three against the six districts for gram as notified by Haryana government.

Talking to Business Standard, K K Mohapatra, regional manager, Agriculture Insurance Company of India Limited, Chandigarh Regional Office, said, "For insurance of loanee farmers for the rabi season of 2005-06, the cut off date for insurance of eligible crop loans is 30 April 2006. Hence, banks should get all the eligible crop loans insured under the National Agricultural Insurance Scheme (NAIS), so that the loanee farmers will not be deprived of their legitimate claims if any arises. The premium of small farmers is only 1.8 per cent of the loan disbursed and for other farmers it is 2 per cent for both the above crops. It is the responsibility of the financial institutions to provide insurance cover for all eligible loanee farmers through the AICL."

Mohapatra also said on 31 March 2006, the AICL got details of insurance cover of mustard crop on 95,379 hectares covering 68,137 farmers in seven districts with sum assured and premium received figure of Rs 83,00,89,446 and Rs 1,66,00,000 respectively. As for the gram, the insurance cover was about 5,103 hectares, covering 2,963 farmers in three districts with sum assured and premium received of Rs 3,22,74,192 and Rs 6,45,483 respectively.

"Financial institutions have sent the report on loanee farmers and their insurance cover of mustard crop from seven districts only. This include Jhajjar, Rewari, Mahindergarh, Hisar, Fatehabad, Sonepat and Bhiwani. But the Haryana government notification also covers Sirsa, Rohtak, Gurgaon, Faridabad and Jind under mustard crop. And as for gram, Bhiwani, Fatehabad and Hisar have been covered while Sirsa, Rohtak and Mahendergarh have been left out," he said.

Apart from indemnifying the farmers, it has been made mandatory to improve the recovery rate of loans for seasonal agriculture operations given to farmers in the state. But financial institutions have been getting away with this mandatory provision, which not only safeguards the interest of farmers, but indemnifies the loss of banks also in a way.

Experts apprehended that there may be loss to mustard crop and gram during this 2005-06 rabi season, hence financial institutions should get insured all eligible crop loan under NAIS, before the date.They estimate that only 10-15 per cent of the total amount of insurance that should have been covered by the financial institutions has been done so far.