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The government of Tamil Nadu suggested the state (Tamil Nadu) and the Centre should equally share the additional premium burden on farmers with the introduction of the new National Crop Insurance Programme (NCIP).
The state expressed the NCIP was introduced by the Centre in a haste, without any consultation with the stake holders.
Farmers in the state were facing acute hardship due to the severe drought that prevailed during 2012-13, which was further compounded by the deficit rainfall (-33%) during the North-East Monsoon this year. At this juncture, the steep hike in the premium would be a burden on the farming community and will adversely affect agricultural prospects, said the state.
In a letter to Prime Minister, Tamil Nadu chief minister J Jayalalithaa said: "The abrupt and sudden decision of the Centre to withdraw the National Agriculture Insurance Scheme (NAIS) and replace it with the Modified National Agriculture Insurance Scheme (MNAIS) / Weather-Based Crop Insurance Scheme (WBCIS) under the newly introduced NCIP from Rabi 2013-2014 without proper consultation with the stakeholders, has come as a rude shock to the farmers."
Tamil Nadu helps farmers by extending a subsidy of 45-50 per cent on the premium payable besides 50 per cent of the crop loss compensation, which is shared with the the Centre over and above the premium collected, said the chief minister.
The Centre's decision would increase the financial burden on the state due to a steep increase in the crop insurance premium under the new programme, she said.
The state was taking all efforts to encourage more and more farmers to get enrolled under crop insurance for which it extends 45-50 per cent premium as subsidy under the NAIS, which is in addition to the five per cent subsidy extended only to small and marginal farmers by the Centre.
As a result, the number of farmers insured under NAIS has increased from 101,000 in 2000-2001 to 976,000 in 2012-2013.
The NAIS guidelines stipulate a premium of 2-3.5 per cent of the sum insured, depending on the season and crop. The government of Tamil Nadu extends 50 per cent premium subsidy, enabling the farmers to pay 1-1.75 per cent of the sum insured.
In the new NCIP, the premium payable by the farmers increases to 3.75 per cent and above. "With such high premia, I really doubt whether farmers will come forward to insure their crops and mitigate their risks," said Jayalalithaa.
