Crop Insurance Scheme- National Agricultural Insurance Scheme (NAIS), Weather Based Crop Insurance Scheme (WBCIS)

National Agricultural Insurance Scheme (NAIS)

The National Agricultural Insurance Scheme (NAIS) was introduced from 1999-2000 replacing the erstwhile Comprehensive Crop Insurance Scheme (CCIS). The main objective of the scheme is to protect the farmers against crop losses suffered on account of natural calamities such as drought, flood, hailstorm, cyclone, fire pests and diseases.

The new scheme is now available to all the farmers—loanee and non-loanee—irrespective of their size of holding. It envisages coverage of all the food crops (cereals, millets and pulses), oilseeds and annual horticultural/commercial crops, in respect of which past yield data is available for adequate number of years.

The objectives of the NAIS are as under:

  • To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases.
  • To encourage the farmers to adopt progressive farming practices, high value in-puts and higher technology in Agriculture.
  • To help stabilise farm incomes, particularly in disaster years.

Crops covered

The Crops in the following broad groups in respect of which

  • The past yield data based on Crop Cutting Experiments (CCEs) is available for adequate number of years, and
  • Requisite number of CCEs are conducted for estimating the yield during the proposed season: a. Food crops (Cereals, Millets & Pulses) b. Oilseeds c. Sugarcane, Cotton & Potato (Annual Commercial / annual Horticultural crops)

Other annual Commercial / annual Horticultural crops subject to availability of past Yield data will be covered in a period of three years. However, the crops which will be covered next year will have to be spelt before the close of preceding year.

States and areas to be covered

The Scheme extends to all States and Union Territories. The States / UTs opting for the Scheme would be required to take up all the crops identified for coverage in a given year. The States / Union Territories once opting for the Scheme, will have to continue for a minimum period of three years.

Limit of coverage

The Sum Insured  may extend to the value of the threshold yield of the insured crop at the option of the insured farmers. However, a farmer may also insure his crop beyond value of threshold yield level upto 150% of average yield of notified area on payment of premium at commercial rates. In case of Loanee farmers the Sum Insured would be at least equal to the amount of crop loan advanced.

Weather Based Crop Insurance Scheme (WBCIS)

The efforts have been made to bring more farmers under the fold of Crop Insurance by introducing a Pilot Weather Based Crop Insurance Scheme (WBCIS) as announced in the Union Budget 2007 in selected areas on pilot basis.

WBCIS is intended to provide insurance protection to the farmers against adverse weather incidence, 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 scheme attractive, premium actually charged from farmers have been restricted to at par with NAIS.  The difference between actuarial rates and premium actually paid by farmers are borne by the Government (both Centre and State concerned on 50:50 basis).

Restructured WBCIS was launched on 18th February 2016 by Hon’ble Prime Minister 12 states implemented the scheme in Kharif 2016 whereas 9 states have implemented the scheme in Rabi 2016-17. Approximately 15 lakhs farmers have been insured in the Kharif 2016 for 16.95 lakh ha of land at premium of Rs983.96 crore for a sum insured of Rs8536.53 crore as per figures available on 31.03.2017.  Weather Based Crop Insurance Scheme (WBCIS) aims to mitigate the hardship of the insured farmers against the likelihood of financial loss on account of anticipated crop loss resulting from adverse weather conditions relating to rainfall, temperature, wind, humidity etc. WBCIS uses weather parameters as “proxy‟ for crop yields in compensating the cultivators for deemed crop losses. Pay-out structures are developed to the extent of losses deemed to have been suffered using the weather triggers.  Weather Station (RWS) or Backup Weather Station (BWS) as the case may be, and the claims process shall commence once the weather data is received. Claims processing are strictly as per the insurance term sheets, payout structure and the Scheme provisions. All standard Claims are processed and paid within 45 days from the end of the risk period. The scheme is being administered by Ministry of Agriculture.

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