Mumbai: Around 10 lakh farmers are expected to be covered under the weather insurance plan by end of the current rabi season. The Agriculture Insurance Company (AIC) alone expects to cover over 5 lakh farmers and insure over 8 lakh hectares of crop for a sum of Rs 1,500 crore in the rabi season. The pilot insurance plan was announced by the Finance Minister in the last Budget.This will be the largest number of farmers covered under weather insurance, given that insurance companies have so far only been able to cover a little over a lakh of farmers annually under other commercial weather insurance products. The AIC and a few private insurers together expect to cover around 10 lakh farmers under the weather insurance plan by this rabi season, said insurance company officials. The pilot, which is being run by AIC in Bihar, Chhattisgarh, Madhya Pradesh and Rajasthan, is a significant step as it offers farmers a substitute to the National Agriculture Insurance Scheme (NAIS) .
Claim payouts so far under the NAIS, the largest insurance scheme in the world (in terms of number of farmers at 1.7 crore), have seen long delays as they are based on yield data. The premium under NAIS has been based on a flat rate system while in the case of weather insurance it is derived on an actuarial basis. The premium under the weather insurance pilot is subsidised in the range of 30-75 per cent, depending on the crop.
Claim payouts so far under the NAIS, the largest insurance scheme in the world (in terms of number of farmers at 1.7 crore), have seen long delays as they are based on yield data. The premium under NAIS has been based on a flat rate system while in the case of weather insurance it is derived on an actuarial basis. The premium under the weather insurance pilot is subsidised in the range of 30-75 per cent, depending on the crop.
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