1. Welcome to Presentation National Agricultural Insurance Scheme
Pilot Modified
National Agricultural Insurance Scheme
(MNAIS)

2. Risks affecting Agriculture Production - A Major Challenge
Vagaries of weather
- rainfall
- temperature
- humidity
- wind
- cyclone
- hailstorm
- flood
- frost
Pest & diseases
Fire
Quality of inputs
Soil
Market prices

3. Risk Management in Agriculture
Crop Insurance - An effective risk management tool which provides a mechanism to the farmers against uncertainties of crop production
Existing Schemes
- NAIS: yield based; non-actuarial premium except horticultural crops / annual commercial crops; underwriting of losses by Central & State Govt. on 50:50 ratio
- WBCIS: weather based ; actuarial premium with premium subsidy shared equally by Central & State Govt.
- CPIS: plant based; actuarial premium

4. Objectives of Crop Insurance
To provide insurance coverage and financial support to the farmers in the event of prevented sowing & failure of any of the notified crop as a result of natural calamities, pests & diseases.
To encourage the farmers to adopt progressive farming practices, high value in-puts and higher technology in Agriculture.
To help stabilize farm incomes, particularly in unfavorable years.

5. Limitations of NAIS Large insurance unit area
Delay in payment of claims due to late submission of yield data & availability of Govt. funds
Pre- sowing/ Planting Risk is not covered
Unattractive basis of calculation of threshold yield
Low indemnity level
Localized calamities are not covered
Post Harvest Losses are not covered
Different seasonality discipline for loanee & non-loanee farmers
Lack of competition

6. Review of NAIS
As per direction of PMO, a Joint Group was constituted by DAC on 31st August, 2004 to study NAIS & suggest improvements
Joint Group under chairmanship of AS (MoA) and JS (MoA), JS (MoF) & CMD(AIC) as members
Joint Group submitted its Report on

7. Proposed Modifications
Sl. No.
Parameters
NAIS
Modified NAIS 1
Insurance Unit
The defined area may be a Gram Panchayat, Mandal, Hobli, Circle, Phirka, Block, Taluka etc declared by GOS
Village Panchayat 2
Early Settlement
The claims are settled based on the final yield estimates submitted by GOS
On account settlement of claims upto 25% of likely total claims 3
Pre- sowing/ Planting Risk
Presently not covered
Prevented/Failed Sowing Risk to be covered upto 25% of SI

8. Proposed ModificationsSN
Parameters
NAIS
Modified NAIS 4
Threshold yield
Moving average yield of preceding 3 years for Rice & wheat and 5 years for other crops
Average yield of preceding 7 years excluding max. 2 years of declared natural calamity by concerned Govt./authority. 5
Indemnity levels
60%, 80% & 90%
70%, 80% and 90% 6
Compulsory/ voluntary nature
Compulsory for loanee farmers and voulntary for other farmers
No change, compulsory for loanee farmers and voluntary for other farmers

9. Proposed Modifications
Sl. No.
Parameters
NAIS
Modified NAIS 7
Localized calamities
Presently not covered
Individual assessment of claims in case of hailstorm, landslide 8
Post Harvest Losses
Post harvest losses on account of cyclones to be covered in coastal areas 9
Seasonality Discipline
Different for loanee and non-loanee farmers
Uniform seasonality discipline for loanee and non-loanee farmers

10. Subsidy & Net Premium for Farmers under MNAIS
Sl.No
Actuarial Premium (% of SI)
Subsidy to Farmers (equally shared by Central and State Govt.)
Premium payable by farmers 1
Upto 2%
NIL 2
>2-5%
40% subject to minimum net premium of 2% of SI
2-3% 3
>5-10%
50% subject to minimum net premium of 3% of SI
3-5% 4
>10-15%
60% subject to net premium of 5% of SI
5-6% 5
>15%
75% subject to minimum net premium of 6% of SI
>=6

11. Steps to be taken by GOI/States/IA
Issue approval. Immediate
States
Select 5 districts
Provide (historical) yield data of past 7 yrs
to all IA (indicate calamity yrs)
Decision to implement
Decide reference parameters & W.S.
for prevented sowing / on a/c payment
Decide IA district-wise
Issuance of State Government Notification
Conduct State Level Bankers’ workshop - Before
Preparation & Plan for CCEs at village level
Payment of premium subsidy (advance) IA
Finalise actuarial premiums
Publicity Immediately upto the cut off date

12. Financial Implications on Govt.
The scheme would be on actuarial regime in which insurance company will receive premium on commercial basis and will be responsible for all claims
GOI & State Govts. will provide premium graded subsidy at different slabs of actuarial premium to make the scheme affordable for farmers
The coverage in proposed MNAIS is expected to 25% of total farmers in 50 districts (about 30 lakh farmers)
The financial implications of MNAIS in 50 districts (NAIS will be withdrawn) would be Rs. 715 crore during XI Plan ( Rs crore & Rs crore)

13. Benefits to farmers under NAIS & MNAIS13

14. Thanks