The Hindu Business Line : Livestock insurance makes farmers to go in for cross-breeding

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Livestock insurance makes farmers to go in for cross-breeding

ICICI LOMBARD EXPERIENCE

M. Ramesh
M.R. Subramani

Chennai, March 12 Livestock insurance, particularly cattle, is catching up in rural India. A general insurance firm such as ICICI Lombard sees this to be as big as the health insurance portfolio.

But more than that, it is encouraging cross-breeding of cattle, says Mr Pranav Prashad, Head – Rural and Agriculture Business Group, ICICI Lombard. “Cattle farmers are bringing good breeds from other regions to their places and are also cross breeding, now that they are aware of livestock insurance,” he says.

Dairies and cooperatives are seeing livestock insurance as one way of protecting their bottom lines. “Dairy farmers are realising that cattle is insurable and financially includable,” says Mr Prashad, adding that this has brought about an awareness of prevention of health problems in cattle.

ICICI Lombard, which has insured nearly one lakh cattle in the three years since it began this venture, sees its livestock business expanding, including extending group insurance for cattle.

Currently, the firm extends livestock insurance to Andhra Pradesh, Chhattisgarh, Orissa and Haryana covering 70 districts. The insurance firm makes use of veterinarians for settling claims and feels it has control over fraud claims.

ICICI Lombard has a tie-up with Livestock Development Authority and it is one of the contracted insurance firms with the latter. The advantage of this is that the authority subsidises 50 per cent of the insurance premium for the cattle. Premium for the cattle is 3 to 5 per cent of the insured sum.

Weather insurance

Overall, the company realises Rs 200 crore as livestock insurance currently. Mr Prashad says ICICI Lombard aims to insure one million cattle by 2009-10. Before that, it plans to have at least 2.5 lakh cattle insured during the next fiscal.

Meanwhile, index-based weather insurance is also drawing the farmers’ interest. From a meagre enrolment of a little over 200 farmers in 2004, ICICI Lombard now has enlisted 2.5 lakh farmers for this policy. About three lakh hectares have been covered by this, Mr Prashad says.

The weather insurance ensures that farmers are compensated through the policy in case weather plays truant with the crop or its output. Different parameters have been set up and the weather index is drawn up district-wise through a tie-up with National Collateral Management Services, an arm of NCDEX. The index monitors rainfall during sowing and temperature during harvest.

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