252
holdings and hence lower sum assured, small and marginal farmers account
for only one-third of total claims; but “this is significantly higher for crops
like paddy, wheat and sugarcane, where more than half of the total claims
disbursed were for these categories” (ibid, p.20).
A closer analysis does reveal some of the drawbacks of the scheme.
First, even after two and a decade of its existence less than one-fifth of the
farmers are insured. Rajasthan is an exception where 50% of the farmers/
holdings are insured (Nair, Reshmy 2010, p.20). Besides, about 90% of the
insured farmers are borrowing farmers. Borrowing farmers themselves
constitute less than 25% of the farm households, thus indicating very meagre
insurance presentation. Second, the Radhakrishna Committee on Agricultural
Indebtedness (Radhakrishna July 2007) had reported that Gujarat alone
accounted for 26% of the total claims. Nair, Reshmy (2010, p.20) also placed
the Gujarat’s share in total indemnity at one-fourth. But, the situation seems
to have improved in recent years. As shown in Appendix 100, Gujarat claims
payable or paid have constituted only around 17.5% cumulatively at the end
of March 2012. The number of farmers benefited in Gujarat have formed
less than 8% of the total. The largest share of farmers benefitted has gone to
Maharashtra (17.5%). No doubt, crop-wise groundnut alone captures 36% of
claims, whereas crops such as maize and jowar accounted for less than 2% of
claims each (Sinha, June 2004).
Some of the other weaknesses highlighted in these analytical studies are:
seemingly high actuarial rates (8% for cotton or 10% for banana, for instance)
and the consequential decline in the coverage of horticultural crops; the non-
coverage of perennial crops, fruits and vegetables; the biggest disadvantage of
the yield insurance scheme is the delayed claim settlement procedure (that
takes at least a year); collusion between implementing agencies and farmers
resulting in wrongful claims; and delayed release of the claims share amounts
by the central and state governments.
As against these constraints in the operation of NAIS, a number of
reform measures have been introduced for making the scheme more farmer
friendly and expand the coverage. First, the risk sharing pattern under NAIS
has been modified effective from
kharif
2011whereby the National Agricultural
Insurance Scheme (NAIS) has become liable for the entire claims wherever
actuarial premium is charged. NAIS is now liable for all claims arising under
annual commercial and horticultural crops. Second, the process of disbursing
claims has been expedited by disbursing without waiting for the receipt of both
the central and state government-shares.
