The Hindu Business Line : Insurance scheme for deficient rainfall launched

The scheme, launched on a pilot basis, will offer coverage for 20 per cent or more fall in rainfall against the normal level. The payment is on Rs/mm basis and premium is Rs 1,296 a hectare. Even if the rainfall is 20 per cent less, the farmer will be able to recover the premium.

New Delhi , July 15

THE Agriculture Insurance Company of India Ltd (AIC) has launched a `Varsha Bima' policy for farmers to provide cover against deficient rainfall during the current kharif season.

"The scheme is being introduced on a pilot basis in 20 rain gauge stations of the India Meteorological Department (IMD). These include Anantapur, Cuddapah, Kurnool, Khammam, Hanamakonda and Nizamabad in Andhra Pradesh, Belgaum, Gulbarga, Bellary and Karwar in Karnataka, Lucknow, Jhansi, Allahabad, Gorakhpur, Gonda and Bareilly in Uttar Pradesh and Alwar, Kota, Bikaner and Barmer in Rajasthan," said Mr Suparas Bhandari, Chairman-cum-Managing Director of AIC.

The scheme would offer coverage against actual rainfall in a particular station during the June-September monsoon period falling 20 per cent or more below the `normal' for that period.

For instance, in Lucknow, the normal rainfall during the entire monsoon season is about 853 mm. Claims would arise when the actual rainfall incidence for the season falls short of the normal 853 mm by more than 20 per cent. "In such a case, all insured cultivators of a particular crop shall be deemed to have suffered the same deviation and become eligible for claims," Mr Bhandari said.

The claim payout would be on a graded slab (i.e Rs per mm) basis and computed as per mm payout at given rainfall range times the deviation in actual rainfall.

In the case of paddy grown in Lucknow, the per mm payment ranges from Rs 7.18 for rainfall of 640-682 mm and going up to Rs 21 for nil rainfall. Thus, suppose the actual rainfall is only 640 mm, the farmer will be eligible to claim Rs 7.18 times 213 mm, the latter being the difference between the actual (640 mm) and the normal (853 mm). In short, he can get Rs 1,529 per hectare, a figure that would touch a maximum of Rs 18,000 per hectare if actual rainfall is nil.

Mr Bhandari said the premium in this case had been fixed at Rs 1,296 per hectare, which means even if the rainfall deficiency is 20 per cent, the farmer will be able to recover the premium. "We are looking at how much subsidy can be given by the Government to bring down the premium burden on the farmer," he added.

According to him, based on the experience derived from the pilot projects this year, it would be possible to introduce the Varsha Bima policy on a larger scale from the 2005 kharif season.

AIC's promoters are the General Insurance Corporation (35 per cent stake) and its four subsidiaries - New India Assurance, United India Insurance, Oriental Insurance and National Insurance (8.75 per cent each) - and Nabard (30 per cent).

AIC currently operates the National Agriculture Insurance Scheme (NAIS), which has been in operation since Rabi 1999-2000, covering 4.62 crore farmers for a sum insured of Rs 40,270 crore. Against this, claims worth Rs 4,477 crore have been paid to 1.50 crore farmers. "We paid claims of Rs 1,820 crore to 43.33 lakh farmers during the drought-hit Kharif 2002 season. 100 per cent of this amount reached the farmers," Mr Bhandari claimed.

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