The Hindu Business Line : GoM set to clear crop insurance for plantations

New Delhi, Aug 15 The Rs 729-crore crop insurance scheme for the plantation industry to benefit the growers of tea, rubber, tobacco and spices spread over a span of five years and to be fully funded by the Centre would be cleared by the Group of Ministers (GoM) “very soon”, the Minister of Commerce and Power, Mr Jairam Ramesh, said on Friday.

The GoM, headed by the Union Minister for Agriculture, Consumer Affairs, Food and Public Distribution, Mr Sharad Pawar, with other members as Finance Minister, Mr P.Chidambaram, Defence Minister Mr A.K. Antony, Overseas Affairs and Parliamentary Affairs Minister, MrVayalar Ravi, Labour Minister, Mr Oscar Fernandes and the Minister of State for Commerce and Power Mr Jairam Ramesh, was to meet here on Thursday but the meeting was postponed.

Plantation crops such as tea, rubber, tobacco and spices (ginger, turmeric, chilli, pepper, cardamom) have enormous potential of foreign exchange earnings unlike the crops covered under the National Agricultural Insurance Scheme (NAIS) that encompasses all food crops (cereals, millets and pulses), oilseeds and annual commercial/horticultural crops.

Explaining the details of the scheme, Mr Ramesh told Business Line said this is an entirely new scheme being piloted by his Ministry for providing insurance coverage to the growers of tea, rubber, tobacco and spices. The coverage is up to 10 hectares except in case of tea and cardamom where land holdings between 10 and 50 hectares would be covered. He said it is proposed to enlist around 30 lakh growers in 22.26 lakh hectares under the scheme in a serious move to provide social security cover to the growers toiling in the plantation industry under difficult conditions.

He said the scheme would accord insurance against the investment in input cost and would bear risks associated with crop loss due to weather (rainfall, temperature and humidity), pest attach and named peril factors (virtually; all natural calamities, specified pests and diseases).

The proposal is to provide 50 per cent subsidy on the insurance premium for land holdings up to 10 hectares (Rs 723.63 crore) and 25 per cent subsidy between 10 and 50 hectares (Rs 5.17 crore). Total subsidy on annual insurance premium would be Rs 728.80 crore for a period of five years. The subsidy cost would be borne by the Union Government out of the interest earnings of the Price Stabilisation Fund Trust (PSFT) amounting to Rs 229.25 crore, while the balance to be met through budgetary support of the order of Rs 499.55 crore.

Explaining the importance of the crop insurance scheme, Mr Ramesh said the extant NAIS has not made much dent (10 per cent coverage) primarily due to high premium rates (not actuarial), reliance on Government subvention for both premium and claim settlement and inordinate delay in clinching claims. Mr Ramesh maintains that the new crop insurance scheme is superior to NAIS and is also financially viable (actuarially determined premium and no claim payout from government).

He said the Cabinet Committee on Economic Affairs (CCEA) went through the proposal and adverted the issue of subsidy sharing by the Central and State governments, keeping in view the pattern in other such schemes, to the GoM. It is in this context that the issue before the GoM is to take a call on 100 per cent funding of the crop insurance scheme by the Government, he said adding that since plantation crops proposed under the scheme are administered under Central legislation, it should be fully funded by the Centre. He said the entire premium is to be paid upfront since State Government’s share is unlikely to come in time.

More Stories on : General Insurance | Policy | Natural Calamities

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
MCX awaits clearances to launch currency derivatives

Pusa-1121 prices crash as export orders dry up

No takers for latex on fall in rubber prices

Prices firm up at Kochi tea auction

Hatsun’s ‘Project White Gold’ set for full-scale launch

No case for vegoil duty hike, for now

GoM set to clear crop insurance for plantations