Crop Insurance in India – Past, Present&Future

In a country like India where nearly 2/3 rd of the population depends on agriculture for their livelihood and agriculture is prone to the vagaries of nature, crop insurance has to play the role of a vital institution. Crop insurance itself cannot increase productivity or be a source of financing, but it can play a role in enhancing both. The Comprehensive Crop Insurance Scheme (CCIS) introduced during the VIIth Five-year plan period, despite its shortcomings, farmers received nearly 6 times the premium as claims, but the coverage could not go beyond 5% of the total farming community. The National Agricultural Insurance Scheme (NAIS), which replaced CCIS w.e.f. 1999–00, is an improved version. All successful crop insurance programs worldwide are actively supported and financed by governments and the case is no different for India, as the social benefits outweigh the social costs. The government has two immediate tasks. One, to streamline the financing of crop insurance through single point subsidy and allow the program to run professionally. And second, to improve the scheme substantially through such measures as covering post harvest losses, package policies, reduction of size of insurance unit, streamlining agricultural relief, setting up an exclusive organisation for implementation.