It seems unlikely that the Ministry of Agricultural Development (MoAD) would be able to spend Rs 60 million — the total amount earmarked for providing subsidy on the premium of crop and livestock insurance — as participation in the programme in the first quarter of the current fiscal 2014-15 has been less encouraging.

According to Ministry of Agricultural Development, it just spent Rs 1.78 million in the first quarter despite providing 75 per cent subsidy on insurance premium charged by insurance companies.

In addition, as per the provision of Crop and Livestock Insurance Directive 2012 issued by the Insurance Board, farmers can enjoy additional 15 per cent discount on government provided subsidised amount if they insure through cooperatives. This means 90 per cent of the premium is covered by the government’s subsidy and the discount provided to cooperatives.

“The ministry has made insurance mandatory for farmers who receive grants from projects run under the MoAD,” Udaya Chandra Thakur, spokesperson for MoAD said, adding, “We expect the number of insurers to increase in the coming days.”

Grants in agriculture sector stand at Rs 12 billion this fiscal.

Thakur also said that lack of awareness is also hindering farmers from insuring their crops and livestock and the ministry is also mulling over conducting awareness programmes through agriculture cooperatives to disseminate information at the grassroots level.

Currently, livestock insurance covers 94 per cent of the amount spent as subsidy of premium and only the remaining six per cent is going towards premium subsidy of crop insurance, as per MoAD.

The Ministry of Finance (MoF) had earmarked Rs 120 million for insurance premium subsidy in previous fiscal 2013-14, of which MoAD had spent only Rs 60 million.

“For this fiscal, MoF allocated the same amount that MoAD had spent in the previous fiscal, but had promised to provide additional budget for premium subsidy of crop and livestock insurance, if required,” said Baikuntha Aryal, joint secretary and chief of the Budget Division under MoF.

Source - http://www.thehimalayantimes.com