Amid concerns over rising incidents of farmer suicides in the country, the Narendra Modi-led government is planning to unveil an exclusive all-in-one insurance product for the farming community as part of its ongoing social security scheme.
To be known as the Unified Package Insurance Scheme (Bhartiya Krishi Bima Yojana), the policy would flaunt nine features with mandatory crop insurance. However, farmers have to choose at least four other features to avail subsidy under crop insurance section, according to a draft prepared by the Finance Ministry.
The draft report is at discussion stage with all the key stakeholders.
The move comes following the successful launch of mass banking, insurance and pension products over the past one year and amidst increasing reports of more and more farmers ending their lives due to indebtedness and other socio-economic issues.
The proposed policy packages various products like crop insurance, health cover, personal accident insurance, live stock/cattle insurance, insurance cover for agriculture implements like tractors and pumpsets, student safety insurance and of course, life insurance, says the draft.
The scheme aims at providing financial protection to farmers, thereby ensuring food security, crop diversification and enhancing growth and competitiveness of agriculture sector besides protecting farmers from financial risks, says the draft.
The cover will be for one-year except for agriculture insurance (which will be bi-annual separately for Kharif and Rabi crops) and will be renewable from year to year.
The scheme would be offered/ administered through general insurers on similar terms which are applicable on other social security covers with necessary approvals and allocation of area, it said.
The scheme shall be implemented through a multi-agency framework by implementing agency under the overall guidance and control of the Union agriculture & cooperation department, and the states concerned in coordination with various other agencies.
The other agencies involved the scheme include financial institutions like commercial banks and cooperative banks, regional rural banks and their regulatory bodies and government departments like agriculture, horticulture, statistics, revenue, information/science & technology and panchayati raj, says the draft.
The agriculture insurance part of the cover will provide compensation to farmers suffering loss due to crop loss/damage arising out of unforeseen events, stabilise their income to ensure continuance in farming, encourage the farming community to adopt innovative and modern agricultural practices and ensure flow of credit to the agriculture sector.
However, the draft is silent on implementation time-frame as well as the quantum of cover being offered.
Those farmers who have taken bank credit will be covered through banks/financial institutions whereas non-loanee farmers shall be covered through banks or insurance intermediaries.
The policy is designed to take care of the insurance needs of farmers associated with agriculture activities and it also provides yield based crop insurance to the farmer based on his ownership rights of land and sown crop, says the draft.
Apart from covering both the personal assets of farmers like the dwelling, it also contains other assets which help him earn a living such as milch cattle, pump-sets and tractors.
The policy also provides protection to farmers and their family members in case of the accidental death/disablement, hospitalisation due to illness and accidental insurance protection of their school/ college going children and providing for education fee to students in case of death of the parent. Moreover, it provides life insurance cover to farmers and their family members, says the draft.
"The concept is good provided it is adequately priced," New India Assurance chairman and General Insurers (Public Sector) Association chairman G Srinivasan told.
Source - http://economictimes.indiatimes.com
