Introduction
Agriculture is a sector, which subject to a high degree of risks and uncertainty. The income and employment generated from the agriculture sector is seasonal, irregular and uncertain. Besides various input factors, dependency of agricultural production is exceedingly on the natural factors such as excessive or scanty rainfall, hails, storms, landslides, peril etc. Adverse and uncertain weather conditions lead farmers to vulnerable situations.
Crop Insurance Schemes in India since Independence
First crop insurance scheme introduced was First Individual Approach Scheme in 1972. Initially, this scheme was comprised to H-4 cotton crop in Gujarat only but later on it was extended to groundnut, wheat, gram and potato in Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu and West Bengal. The scheme insured only 3110 farmers and paid premium of Rs.4.54 lakhs only as against Rs.37.88 lakhs, therefore, it was continued till 1978-79 only. Another scheme introduced in 1979 was Pilot Crop Insurance Scheme (PCIS) based on area approach. This scheme covered 6.23 lakhs farmers growing cereals, millets, oilseeds, cotton, potato and chickpea and was implemented in 12 states till 1984-85. In line with this scheme, a new scheme was launched namely Comprehensive Crop Insurance Scheme in 1985. It was based on short term crop credit and homogenous area approach. This scheme covered 763 lakh farmers for a premium of Rs.404 crore against claims of Rs.2303 crore. Both the schemes, PCIS and CCIS were subject to the farmers having seasonal agricultural loans from any financial institutions. But in case of PCIS, scheme was on voluntary basis while CCIS was compulsory for all the loanee farmers. Different states were demanding for the timely modification in CCIS. Therefore, a new scheme was launched in 1997 viz., Experimental Crop Insurance Scheme. Afterwards, numbers of schemes were launched to insure farmers from the crop losses due to different calamities.
Schemes launched are listed as follows:
National Agriculture Insurance Scheme in India
The National Agricultural Insurance Scheme (NAIS) was introduced in Rabi 1999-2000 by the Agriculture Insurance Company of India Ltd. (AIC). This scheme was the replacement of Comprehensive Crop Insurance Scheme (CCIS). The main objective of the Scheme was to protect the farmers against the crop losses suffered on account of natural calamities, such as, drought, flood, hailstorm, cyclone, pests and diseases. The scheme focused on to increase coverage of farmers, crops and risk commitment. It was available to all the farmers both loanee and non-loanee irrespective of their size of holding. It covers all the food crops (cereals, millets and pulses), oilseeds and annual commercial/horticultural crops, in respect of which past yield data is available for adequate number of years 3. The Scheme was continued till Kharif2013; however, some States are allowed to implement NAIS during Rabi 2013-14 also. The Scheme was optional for States/Union Territories (UTs) and it had been implemented by the 25 States and 2 Union Territories in one or more seasons.
Modified National Agricultural Insurance Scheme (MNAIS)
To improve further and make the Scheme easier and more farmer friendly, a proposal on Modified National Agricultural Insurance Scheme (MNAIS) was prepared and was approved by Government of India for implementation on pilot basis in 50 districts from Rabi 2010-11 seasons.
Pilot Weather Based Crop Insurance Scheme (WBCIS)
With the objective to bring more farmers under the fold of Crop Insurance, a Pilot Weather Based Crop Insurance Scheme (WBCIS) was launched in 20 States in 2007. Apart from Agriculture Insurance Company of India, some private companies have also been allowed to implement the Scheme. The WBCIS is intended to provide insurance protection to the farmers against adverse weather incidences, such as deficit and excess rainfall, high or low temperature, humidity etc. which are deemed to impact adversely the crop production. It has the advantage to settle the claims within shortest possible time. The WBCIS is based on actuarial rates of premium but to make the 4 Scheme attractive, premiums actually charged from farmers has been restricted at par with NAIS. The WBCIS was implemented in 18 States and 469.38 lakh farmers were covered for a premium of Rs.7,51,920 lakh against the claims of Rs. 52,860 lakh under the Scheme from 2007-08 to 2012-13. The total area insured was 632.01 lakh hectares during the same period.
Coverage of NAIS, WBCIS and MNAIS in Maharashtra
Among all the states, Maharashtra is the state with higher number of farmers insured under the schemes NAIS, MNAIS and WBCIS. Total number of farmers insured under NAIS till the year 2012-13 is 34.5 million, out of which 30.3 million were insured during Kharif season and 4.2 million in Rabi Season (Table 1). There is significant decrease in number of farmers insured i.e., 29.5 million in 2000-01 to 17.4 million in 2013-14. However, area insured is decreased by more than 50 per cent during the same time period. Out of total farmers insured, only 31 per cent of them get benefitted till 2012-13.
Table 1 Season-wise Farmers/Area Covered, Sum Insured and Insurance Charges under NAIS in Maharashtra (2000 to 2012-2013)
| Season | FI ('000) | AI ('000 Ha.) | SI (Rs. M) | FB ('000) |
| Kharif 2000 | 2529 | 2817 | 17780 | 1057 |
| Rabi 2000-01 | 421 | 379 | 4640 | 174 |
| Kharif 2001 | 2667 | 3119 | 18140 | 551 |
| Rabi 2001-02 | 86 | 61 | 200 | 20 |
| Kharif 2002 | 1793 | 2275 | 10130 | 229 |
| Rabi 2002-03 | 248 | 274 | 840 | 121 |
| Kharif 2003 | 1727 | 1880 | 9210 | 528 |
| Rabi 2003-04 | 1035 | 1160 | 3490 | 944 |
| Kharif 2004 | 2070 | 1928 | 11210 | 693 |
| Rabi 2004-05 | 141 | 104 | 650 | 22 |
| Kharif 2005 | 2316 | 1888 | 12230 | 245 |
| Rabi 2005-06 | 239 | 238 | 970 | 26 |
| Kharif 2006 | 1638 | 1269 | 8350 | 620 |
| Rabi 2006-07 | 38 | 45 | 150 | 1 |
| Kharif 2007 | 1892 | 1213 | 8560 | 260 |
| Rabi 2007-08 | 92 | 69 | 250 | 0.145 |
| Kharif 2008 | 3453 | 2233 | 16370 | 1713 |
| Rabi 2008-09 | 52 | 52 | 310 | 10 |
| Kharif 2009 | 3102 | 2144 | 24350 | 1329 |
| Rabi 2009-10 | 82 | 96 | 750 | 1 |
| Kharif 2010 | 2125 | 1254 | 12630 | 82.5 |
| Rabi 2010-11 | 56 | 61 | 640 | 2 |
| Kharif 2011 | 2192 | 1441 | 15720 | 163 |
| Rabi 2011-12 | 320 | 316 | 2520 | 283 |
| Kharif 2012 | 1331 | 1047 | 13700 | 417 |
| Rabi 2012-13 | 992 | 883 | 10470 | 901 |
| Kharif 2013 | 1484 | 1331 | 19760 | 287 |
| Rabi 2013-14 | 258 | 206 | 2690 | 67 |
| Kharif | 30320 | 25842 | 198170 | 8176 |
| Rabi | 4179 | 4062 | 29860 | 2613 |
Note: M- Million, FI- Number of Farmers Insured, AI- Area Insured, SI- Sum Insured, FB- Number of Farmers Benefitted
Farmers got insured under the scheme MNAIS in Maharashtra for Rabi 2010-11 (Table 2). Number of farmers got insured in Rabi 2010-11 was only 3663 and area insured was 5151 hectare. The corresponding figure for 2011-12 was 48301 and area insured was 44470 hectare and sum insured by them was around Rs. 70 million. There is only slight variation in number of farmers insured and area insured from the period of implementation. Total number of farmers insured under MNAIS was around 52 thousand and area insured was 50 thousand. On an average less than 1 hectare area was insured by each farmer.
Table 2: Season-wise Farmers/Area Covered, Sum Insured and Insurance Charges under MNAIS in Maharashtra (2010-11 to 2012-2013)
| Season | FI ('000) | AI ('000 Ha.) | SI (Rs. M) |
| Rabi 2010-11 | 3.663 | 5.151 | 5.9278 |
| Kharif 2011 | 46.958 | 42.812 | 68.1056 |
| Rabi 2011-12 | 1.343 | 1.658 | 2.1771 |
| Kharif | 46.958 | 42.812 | 68.1056 |
| Rabi | 5.006 | 6.809 | 8.105 |
Note: M- Million, FI- Number of Farmers Insured, AI- Area Insured, SI- Sum Insured, FB- Number of Farmers Benefitted
Implementation of WBCIS in Maharashtra started from Rabi 2011-12 onwards (Table3). Till the year 2013-14, 0.61 million farmers insured 0.71 million hectare areas and sum insured by them was Rs. 2326 million. However, out of the total insured farmers, 0.46 million farmers get the benefit under this scheme i.e., 74 per cent of the total number of farmers insured. Unlike NAIS and MNAIS, in case of WBCIS number of farmers insured under Rabi season is much higher than that of Kharif season. There is very slight variation in number of farmers insured and area insured during the period 2011-12 to 2012-13.
Table 3: Season-wise Farmers/Area Covered, Sum Insured and Insurance Charges under WBCIS in Maharashtra (2011-12 to 2012-2013)
| Season | FI ('000) | AI ('000 Ha.) | SI (Rs. M) | FB ('000) |
| Rabi 2011-12 | 45 | 48 | 427 | 11 |
| Kharif 2012 | 4 | 5 | 27 | 3 |
| Rabi 2012-13 | 62 | 64 | 583 | 20 |
| Kharif 2013 | 11 | 11 | 64 | 1 |
| Rabi 2013-14 | 44 | 50 | 369 | 26 |
| Kharif | 462 | 551 | 948 | 402 |
| Rabi | 151 | 162 | 1378 | 56 |
Note: M- Million, FI- Number of Farmers Insured, AI- Area Insured, SI- Sum Insured, FB- Number of Farmers Benefitted
It is clear from the Table 4, major crops insured under NAIS in Maharashtra during Kharif season are Cotton, Paddy, and Soybean and during Rabi season Bengal gram, Jowar, Wheat. In case of Kharif crops, highest numbers of farmers are insured under Soybean followed by Cotton and Paddy for the year 2013. However, in case of Rabi crops, highest numbers of farmers are insured under Jowar followed by Bengal Gram and Wheat.
Table 4: Crop-wise Farmers/Area Covered, Sum Insured and Insurance Charges under NAIS in Maharashtra (2011-13)
| Season | FI ('000) | AI ('000 Ha.) | SI (Rs. M) |
| Kharif 2011 | |||
| Cotton | 113 | 125 | 2097 |
| Paddy | 317 | 270 | 4637 |
| Soyabean | 500 | 413 | 4057 |
| Kharif 2012 | |||
| Cotton | 138 | 157 | 3300 |
| Paddy | 196 | 192 | 2660 |
| Soybean | 314 | 275 | 3423 |
| Kharif 2013 | |||
| Cotton | 283 | 328 | 6774 |
| Paddy | 150 | 161 | 2343 |
| Soybean | 398 | 403 | 5990 |
| Rabi 2011 | |||
| Bengal gram | 51 | 35 | 467 |
| Jowar | 158 | 186 | 1039 |
| Wheat | 0.4 | 0.3 | 2 |
| Rabi 2012 | |||
| Bengal gram | 278 | 184 | 3285 |
| Jowar | 477 | 507 | 4164 |
| Wheat | 3 | 2 | 10 |
| Rabi 2013 | |||
| Bengal gram | 87 | 60 | 1159 |
| Jowar | 96 | 95 | 729 |
| Wheat | 0.3 | 0.1 | 1 |
Note: M- Million, FI- Number of Farmers Insured, AI- Area Insured, SI- Sum Insured, FB- Number of Farmers Benefitted
In case of WBCIS, major fruits insured were Banana, Grape, Orange, Mango, Guava, Pomegranate and Cashewnut. For the year 2013, only four fruits were insured i.e. Cashewnut, Grape, Guava, and Pomegranate. Among all, highest numbers of farmers were insured under Guava followed by Grape, Pomegranate and Cashewnut (Table 5).
Table 5 Crop-wise Farmers/Area Covered, Sum Insured and Insurance Charges under WBCIS in Maharashtra (2011-13)
| Season | FI ('000) | AI ('000 Ha.) | SI (Rs. '000) |
| 2011 | |||
| Banana | 3.3 | 5.0 | 500423 |
| Grape | 11.2 | 11.9 | 1789922 |
| Mango | 4.1 | 4.4 | 439459 |
| Orange | 15.3 | 15.0 | 901676 |
| Pomegranate | 8.0 | 9.1 | 453025 |
| 2012 | |||
| Banana | 13.3 | 21.1 | 2110671 |
| Grape | 6.0 | 6.7 | 1005774 |
| Guava | 6.0 | 6.7 | 1006239 |
| Mango | 3.7 | 2.9 | 289173 |
| Pomegranate | 2.8 | 3.1 | 312217 |
| 2013 | |||
| Cashewnut | 0.6 | 26365 | 0.4 |
| Grape | 3.1 | 510850 | 3 |
| Guava | 3.4 | 519043 | 4 |
| Pomegranate | 1.3 | 122299 | 1 |
Note: FI- Number of Farmers Insured, AI- Area Insured, SI- Sum Insured, FB- Number of Farmers Benefitted
Summary and conclusion
The data presented in the tables indicate that the coverage of crop insurance schemes putting together all the insurance schemes is limited. This is true in terms of the number of farmers covered, and number of crops brought under the schemes and total area covered. All the three schemes face various constraints. The most important of them being, the attitude of farmers towards the concept of crop insurance. It is noted that farmers believe the crop insurance as a source of expenditure, than a risk transfer mechanism. Further, constraints in crop insurance in terms of the delay in delivery of compensation, procedural difficulties and the sum received by the farmers are sources of discontent among farmers against crop insurance. Therefore, attempts are needed to enhance the depth and coverage of crops insurance, so that it is more inclusive and effective as a risk management mechanism.
About Author / Additional Info:
Working as Senior Scientist (Agricultural Economics). Working on rainfed agriculture, risk management and natural resource economics.