The existing crop insurance scheme MNAIS remains unsuccessful as it is being implemented in only six states because farmers are forced to pay a higher premium and get a very small amount of claim due to capping of the sum insured, a senior Agriculture Ministry official said.
The Modified National Agricultural Insurance Scheme (MNAIS) is being implemented since 2013-14 rabi season in Andhra Pradesh, Rajasthan, Uttar Pradesh, Uttarakhand, Goa and Kerala. Under MNAIS, premium rates to be paid by farmers are 2-15 per cent while the actuarial premium is up to 57 per cent depending on high-risk crops and areas. "In MNAIS, premium rates have been capped and if the actuarial premium rate is higher than the capped rate, the sum insured would get reduced in the same proportion. This would lead to lower payments in the case of calamity in spite of higher premium rates," the official said.
For example, the actuarial premium of paddy in Lalitpur district of Uttar Pradesh was 22 per cent for Kharif 2014 and sum insured per hectare was Rs 30,000. Since premium was capped at 11 per cent under MNAIS, the sum insured accordingly was reduced to Rs 15,000, he said.
The official further said a farmer would have paid a premium of Rs 825 for the reduced sum insured of Rs 15,000.