The Government on Thursday approved the Modified National Agricultural Insurance Scheme (MNAIS).
Significantly, private sector insurers with adequate infrastructure and experience will also be allowed in the implementation of MNAIS.
“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 stabilising farm income particularly at times of crop failure on account of natural calamities,” an official statement said.
Central sector scheme
The Cabinet Committee on Economic Affairs gave its approval for making budgetary provisions of Rs 358 crore for the MNAIS for 2010-11 and 2011-12.
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, the statement said.
Keeping in view the risks in agriculture production, the Agriculture Ministry 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 after many deficiencies in the scheme were identified during its implementation.
The MNAIS has been formulated, incorporating the necessary modifications in consultation with States to remove the deficiencies and make it more comprehensive and farmer-friendly.
Terms of the scheme
In the MNAIS, actuarial premiums will be paid for insuring the crops and hence the claims liability would be on the insurer.
The unit area of insurance for major crops will be the village panchayat.
Besides, the indemnity amount shall be payable for prevented sowing/planting risk and for post-harvest losses due to cyclone.
According to MNAIS, ‘on account payment’ up to 25 per cent of likely claims would be released as advance to provide immediate relief to farmers.
There will be uniform seasonality discipline for loanee and non-loanee farmers.
It also has a more proficient basis for calculation of threshold yield and minimum indemnity level of 70 per cent instead of 60 per cent.
MNAIS with improved features will have two components — compulsory and voluntary.
Loanee farmers will be insured under ‘compulsory category’ while non-loanee farmers will be insured under ‘voluntary category.’