The country is witnessing an increased distress from farmers, due to crop failure. Suicides among farmers is not uncommon, which makes insurance all the more necessary.
But, crop insurance for farmers has its own problems. The Modified National Agricultural Insurance Scheme (MNAIS) was introduced by the Government of India, which was to be a vast improvement over the earlier NAIS, because it was largely based on actuarial premium rates.
How does the Modified National Insurance Scheme Work?
This scheme is beneficial for farmers who have taken a loan, as it would cover crop loans that have been sanctioned by the banks or institutions as the case maybe.
The state government will decide on the indemnity level, which is assigned based on the risk profile and the classification of the crop in the selected district (low, medium & high).
The indemnity level will be decided by the State Level Coordination Committee on Crop Insurance (SLCCCI) based on a standard principle.
Has the Modified National Insurance Scheme Worked?
But, this scheme has not been preferred by farmers as rates are higher. "In MNAIS, premium rates have been capped and if the actuarial premium rate is higher than the capped rate, the sum insured would get reduced in the same proportion. This would lead to lower payments in the case of calamity in spite of higher premium rates," a PTI report has stated
According to these reports under MNAIS, premium rates to be paid by farmers are 2-15 per cent while the actuarial premium is up to 57 per cent depending on high-risk crops and areas.
In any case farmers who wish to take a crop insurance in India can visit the following private insurance companies or get it done through the portals.
The list of companies where farmers can take crop insurance scheme in India are as follows:
Farmers can increasingly opt for crop insurance online. It is imperative given the drought kind of situation in the country for the last couple of years. The insurance package in some cases can be rather comprehensive covering loss of cattle, breakdown of pumpset, loss or damage to tractor, theft, fire explosion and loss to critical farming equipment.
How much can be afforded by the farmer with small and scattered landholdings is the big question.