National Agricultural Insurance Scheme

National Agricultural Insurance Scheme (NAIS) was introduced by the Government of India to provide insurance coverage and financial subsidy to the farmers in the event of crop losses suffered on account of natural calamities, pests and diseases. This scheme aims to help stabilise farm incomes, particularly in disaster years. In this article, we look at the National Agriculture Insurance Scheme in detail. To know about Agriclinic and Agribusiness Centers Scheme

Eligibility Criteria

This scheme is applicable to all farmers including both the farmers-loanee and non-loanee farmers irrespective of their size of holding. This National Agricultural Insurance Scheme covers the following groups of farmers listed below:

Based on compulsory form, all farmers including sharecroppers and tenant farmers growing the notified crops in the notified areas and availing Seasonal Agricultural Operations (SAO) loans from Financial Institutions (i.e.) Loanee Farmers.
Based on voluntary form, all other farmers growing notified crops (i.e., Non-Loanee farmers) are eligible to opt for the Scheme.

Salient Features of the Scheme

The below following are some of the main features and benefits of applying for a National Agricultural Insurance Scheme.

Corps Covered
Food crops (Cereals, Millets and Pulses)
Oilseeds
Sugarcane, Cotton and Potato

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

Sum Insured (SI) for Loanee Farmers

The Sum Insured would be equal to the amount of crop loan advanced.
Further, in the case of Loanee farmers for the purpose of obtaining the loan, the Insurance Charges will be an additional amount to the Scale of Finance.
In the case of Crop Loan disbursement procedures, guidelines of RBI/NABARD will be applied.

Limit of Coverage

At the option of insured farmers, the SI may extend to the value of the threshold yield of the insured crop. Further, a farmer may also ensure his crop beyond the threshold yield value level upto 150% of average yield value of notified area on premium payment at commercial rates.

Premium Rates

A premium subsidy of 50% applies to the small and Marginal farmers to be shared equally by the Indian Government and State/ UT Government. The premium bonus will be phased out in a period of 3 to 5 years, subject to analysis of the financial results and the reply of the farmers at the end of the 1st year of the implementation of the Scheme. The below tabulated are the premium rates of the crops.

S.No	Season	Crops	Premium Rates
1.	Kharif	Bajra and Oilseeds Other crops (cereals, other millets and pulses)	3.5% of Sum Insured or Actuarial rate, whichever is less 2.5% of Sum Insured or Actuarial rate, whichever is less
2.	Rabi	Wheat Other crops (other cereals, millets, pulses and oilseeds)	1.5% of SI or Actuarial rate, whichever is less 2.0% of Sum Insured or Actuarial rate, whichever is less
3.	Kharif and Rabi	Annual Commercial / annual Horticultural crops	Actuarial rates

Note: The actuarial rates would be applied at District/ Region/ State level at the option of the State Government/ UT.

Procedure for Claims

A yield guarantee is operating on “Area approach” basis. There is a guaranteed yield termed as Threshold Yield for every crop in every Homogenous Area that includes taluka, block or gram panchayat etc. If current season’s actual yield recorded is lower than the Threshold yield, then claims become payable. Yield data used for claims is generated under General Crop Estimation Surveys (GCES) by way of crop cutting experiments. The procedure of assessment and settlement of claims are automated processes, and the claim amount is credited to the insured farmers’ bank account. No paperwork is required to be done by insured farmers or intermediaries.