Ministry of Agriculture, the Government of India (GOI) vide communication No.13011/02/2008-Credit II(Pt.) dated 7th March
2012 issued the administrative instructions for implementation of
Modified National Agricultural Insurance Scheme (MNAIS) as a pilot in selected Districts during Rabi 2012-13 season. The Government of Andhra Pradesh subsequent to the communication from that
GoI selected three Districts viz. Nellore, Prakasam and Warangal of
Andhra Pradesh for implementation of MNAIS on pilot basis in
Rabi 2012-13 season.
The details of the notification with respect to the pilot MNAIS, as decided in the SLCCCI meeting held on 01.10.2012 are described below:
MNAIS will be implemented by Agricultural Insurance Company of India (AIC) which is implementing NAIS and WBCIS in Andhra Pradesh.
(1) Districts and Crops Notified:
The district-wise Crops notified by the State are provided here below:
|1.||Nellore||1.Rice (Village Insurance Unit Scheme) ,
2.Blackgram, 3.Red Chilly, 4.Greengram,
|2.||Prakasam||1Rice (Village Insurance Unit Scheme),
2.Bengalgram, 3.Blackgram, 4.Red Chilly,
5.Greengram, 6.Groundnut, 7.Jowar(UI),
|3.||Warangal||1.Rice (Village Insurance Unit Scheme),
2.Red Chilly, 3.Jowar(UI), 4.Maize, 5.Groundnut
The crop-wise Indemnity Level (IL), Sum Insured limits and Premium Rates:-
Under MNAIS, three levels of indemnity i.e, 70%, 80% and 90% are considered corresponding to high risk, medium risk and low risk and the premium rates are worked out on exposure rating method in consultation with experts, professional actuary and Government of India.
The crop-wise Indemnity Level (IL) and Premium Rates are provided in table-1 and Table 1(A).
(2)Farmers Eligible for Coverage:-
All farmers including sharecroppers, tenant farmers growing the notified crops in the notified areas are eligible for coverage.
The Scheme covers following groups of farmers:
a) On a compulsory basis for loanee farmers: All farmers growing notified crops and having sanctioned credit limits for Seasonal Agricultural Operations (SAO) loans from Financial Institutions for notified crop (s) as on31/12/2012.
Bank branch will apportion coverage among insurable crops, based on acreage mentioned in loan application (cropwise) or on the basis of actual area sown as declared by the farmer.
b) On voluntary basis for Non-loanee farmers: All other farmers growing notified crops who opt for the Scheme. These farmers could be:
(i) Individual owner-cultivator farmers
(ii) Farmers enrolled under contract farming, directly or through promoters / organizers.
(iii) Groups of farmers / societies serviced by Fertiliser Companies, Pesticide firms, Crop Growers associations, Self Help Groups (SHGs), Non-Governmental Organizations (NGOs), and Others.
(iv) Corporate farms
(3) Insurance Unit (IU)
For Rice in all the three above said districts the IU will be Revenue Village\Group of Villages, while for other crops, the IU would be Mandal\Group of Mandals.
The details of insurance units district- wise crop-wise are furnished in
Annexure –I to III appended.
(4) Premium subsidy and Sharing of Premium Subsidy: Premium subsidy shall be available to farmers upto Compulsorycoverage or value of Threshold Yield, whichever is higher for loanee farmer and value of TY for non loanee farmers. The difference between the Actuarial (Gross) Premium and the Premium payable by the farmer, is shared equally between the Government of India and State Government
Further, the subsidy part of the premium shall be remitted by the State Government to AIC in advance, i.e, at the beginning of the Season, based on fair estimates.
(5) Sum Insured Limits & Coverage: LOANEEFARMERS:
(a) COMPULSORY COVERAGE:- The Sum Insured for individual farmer will be the product of farmer’s ‘area under cultivation’ (in hectare) declared / as mentioned in loan application for that notified crop and Compulsory Coverage Sum Insured per hectare and net premium payable by farmer as mentioned in this Notification in Table I & I (A).
(b) ADDITIONAL COVERAGE:- If per hectare sanctioned credit limit for the crop is less than per hectare Value of Threshold Yield, the farmer can opt for the Additional Coverage upto value of TY as per Table 1 and 1(A). The farmer has to submit a Proposal Form in this regard in the Bank where Compulsory Coverage is done. The farmer has to mention the area proposed under Additional Coverage. Cut-off-Date of submission of Proposal Form applicable for Non-Loanee Farmers shall be applicable for these Loanee Farmers as well
If the per hectare Compulsory Coverage Sum Insured is more than per hectare Value of Threshold Yield, No additional coverage is available(with subsidy).
(c) EXTENDED COVERAGE:-
(i) Extended Coverage is not available if the per hectare Compulsory Coverage Sum Insured is MORE than the 150% value of Average Yield.
(ii) If the per hectare Compulsory Coverage Sum Insured is
LESS than the 150% value of Average Yield, Extended Coverage is the difference between the 150% Value of Average Yield and Compulsory Coverage Sum Insured. Farmers have the option to go for higher sum insured. But for the difference amount in the Sum insured, no subsidy will be payable.
The Farmers can opt for Extended Coverage as per Table – 1 and has to mention the area proposed under Extended Coverage.
Cut-off-Date of submission of Proposal Form applicable for Non-
Loanee Farmers shall be applicable for these Loanee Farmers as well. Actuarial Premium Rates as per Table – 1 is payable by the farmers for the Extended Coverage.
Farmers desirous of joining the Scheme for a Notified Crop under Notified Region in a Crop Season and who are not covered as Loanee Farmers for the set of land and are eligible for coverage can fill up Proposal Form and within stipulated cut-off-date submit the proposal form along with the premium to nearest Bank Branch or Authorized channel partners i.e. United India Insurance Company Limited or Insurance Intermediaries, MI Agents of the Insurance Company. Bank Account is Essential for Non-Loanee farmers
(a) NORMAL COVERAGE:- The Normal Coverage is the Value of Threshold Yield (TY) and the net premium rate as per Table –
1 is payable by the farmer. The farmer has to mention in the proposal form, the area proposed under Normal Coverage.
(b) EXTENDED COVERAGE:- Extended Coverage is the difference between the 150% Value of Average Yield and Value
of Threshold Yield. The farmer has to specify in the proposal form, the area proposed under Extended Coverage. Coverage
beyond 100% value of Threshold yield and upto 150% value of
Average yield shall not have premium subsidy
(6) Seasonality Discipline
The seasonality discipline (cut-off dates) as applicable to various crops during Rabi 2012 season is as follows:
|A C T I V I T Y||CUT OFF PERIOD/DATE|
|Loaning period (loan sanctioned) for Loanee farmers covered under Compulsory basis||UPTO 31ST DEC 2012|
|Cut-off date for receipt of Proposals of non
loanee farmers by
Banks / PACs.
|31ST DEC 2012|
|Cut-off date for receipt of Declarations of
Loanee farmers from
Banks by AIC
|31ST JAN 2013|
|Cut-off date for receipt of Declarations of non
loanee farmers from
Banks by AIC
|31st JAN 2013|
|Cut-off date for receipt of Declarations of non
loanee farmers from Intermediaries/other Channels.
|15TH JAN 2013|
|Cut-off date for receipt of yield data||Preferably within a month from the final harvest and not beyond 31ST JULY 2013|
(7) Coverage Procedure
(A) LOANEE FARMERS (COMPULSORY BASIS) :
The present system of Nodal Bank under NAIS, will continue for MNAIS as well, wherein AIC is not required to deal with all the loan advancing points (branches/PACs) and instead, deals only with designated ‘nodal points’, at district level which are mostly the controlling offices of the branches/PACs. Loanee farmer shall continue to be covered by the present Nodal Bank system. All the Banks (including private sector Banks) where Crop loans are Sanctioned/Advanced for the Notified Crops in a Notified Insurance Unit (IU) for a NotifiedCrop Season, are required to be COMPULSORILY insured under MNAIS.
For loanee farmers, the modalities for submission of declarations will be the same as in the existing NAIS. Whenever a bank sanctions loan for notified crop in notified area, the same is eligible for compulsory coverage as per seasonality discipline.
The Loan advancing Bank Branch / Primary Agriculture Cooperative Society (PACS) shall prepare for each IU, a Premium Register giving details like Name of the Farmer, Crop Loan Account Number, crop- wise Area Insured, crop-wise Compulsory Sum Insured & Premium, etc.
Bank branch will apportion coverage among insurable crops, based on acreage mentioned in loan application crop wise or on the basis of actual area sown as declared by the farmer.
For Loanee farmers Opting Sum Insured beyond Compulsory Sum Insured, the premium register should include Crop-wise Area Insured, Sum Insured & Premium under Additional Coverage, & Crop-wise Area Insured, Sum Insured & Premium under Extended Coverage.
Based on the Premium Register and other Crop loan records, a monthly consolidated statement of crop-wise and IU-wise details of crop insurance with insurance charges (Premium payable by Farmer), and remit the same to its Nodal Bank within 15 days of the month during which the loan was sanctioned (cut off date). The bank branch / PACS shall finance the additional loan towards premium amount payable by the farmer, and debit the same to Crop loan account
For the crop loans sanctioned through Kisan Credit Cards (KCC) which are eligible for compulsory coverage, banks shall maintain all back up records, registers relating to compliance with MNAIS and its seasonality discipline, cut-off-date for submitting the Declarations as in the case of normal crop loans. Bank branch shall apportion the coverage among the insurable crops based on either the acreage mentioned in loan application based on which the
‘Maximum Borrowing Limit (MBL)’ is fixed by the bank or in the proportion the farmer declares separately for the Season.
Crop loans advanced against hypothecation of gold / ornaments are also eligible for compulsory, subject to insurability of crop and seasonality discipline.
The Nodal Branch, in turn, shall consolidate these statements from the bank branches / PACS under its jurisdiction into Month-wise, IU-wise, Crop-wise Declarations, and forward the same to AIC along with a bank cheque / demand draft towards the insurance premium, in accordance with the cut off dates as specified in the Notification for that particular crop and season for Loanee farmers. For the declarations pertaining to Additional/Extended Sum Insured, the cut off dates as specified in the Notification for Non Loanee farmers shall apply.
(B) PROCREDURE FOR COVERAGE OF NON-LOANEE FARMERS
a) Non-loanee farmer has to operate an SB A/c in any Cooperative Bank/ Schedule Commercial Bank/Regional Rural Bank in his area.
b) The farmer has to submit the duly filled-in prescribed proposal form along with documents in support of his ownership of land and requisite premium at Bank Branch/PACSs. If required by
AIC, the Farmer has to submit the Certificate of Sowing of the
c) Apart from Banks, the Non-loanee farmer can also avail insurance through insurance intermediaries/ Authorised Agents
of AIC /Department of Agriculture
(8) Different Methods of Indemnification
Loss assessment is based on the Area approach except in case of post harvest losses due to cyclone and losses due to localized calamity like hail storm .
If ‘Actual Yield’ (AY) per hectare of insured crop for insurance unit (calculated on basis of requisite number of CCEs) in insured season, falls short of specified ‘Threshold Yield’ (TY), all insured farmers growing that crop in defined area are deemed to have suffered shortfall in yield of similar magnitude. MNAIS seeks to provide coverage against such contingency.
Where, Threshold yield for a crop in a notified insurance unit, is the average of past seven years (excluding calamity year(s) as notified by State Government/UT) multiplied by applicable indemnity level for that crop.
Indemnity level is 90%, 80% & 70% corresponding to Low Risk, Medium Risk & High Risk areas which is notified for a particular crop at district level.
The crop loss shall be assessed on the basis of following indemnification methods, as per the provisions of the Scheme and Operational Modalities
(A) Wide Spread Calamities
i)Based on crop yield: The Scheme operates on basis of ‘Area Approach ’i.e., Defined Areas for each notified crop for widespread calamities and insurance unit is revenue Village/mandal/group of mandals as specified crop wise in item(3) above .
Based on actual yield furnished by Directorate of Economics and Statistics(DES),indemnity is calculated for each crop\insurance unit at the end of season.
However, in case of severe calamity where loss assessment is possible proximate to the final estimates, an on-account payment upto 25% of the likely claims of the affected crops based on the extent of loss can be paid as adhoc payment during the season. On account
payment shall be implemented since proxy indicators i.e. AWS/State Rainguague stations are available in the proposed districts and such data may be considered for payment, only if expected yield is less than
50% of normal yield. Appraisal of mid-season adversity and quantum of on-account payment will be established jointly by Government of India/ State Government/UT and AIC. In case of near total loss situation during the season (i.e. at a stage of the crop cycle when complete input cost is not incurred), the losses will be paid based on ‘graded scale’ of payment.
(ii) Prevented Sowing /Planting compensation upto maximum of 25% of the sum insured based on the crop can be given (based on proxy indicators like weather data, area enumeration, satellite imagery, etc.) if 50% of the area in the IU could not be sown or with sowing failure. Once the IU is chosen for this benefit, the insurance cover ceases to operate for the subsequent period of the season. Area sown particulars will also be provided by DES, within one month after end of normal sowing season. As an illustration ,say,50% of 25% (of suminsured ) may be paid if sowing could not be done;75% of 25% if sowing is done ; and 100% of 25% if the germinated crop is withered away or destroyed at very early stage.
(B) Farm level Assessment: (i) Localized Risks – Losses arising due to operation of hailstorm will be assessed at farm level, and the losses are settled in respect of all the three notified districts. (ii) loss /
/damage to harvested crop lying in ‘cut & spread’ condition by cyclonic rains for a period of 14 days from harvesting as per the scheme, in the coastal districts i.e. Prakasham and Nellore. On receipt of loss intimation, AIC in coordination with DLMC/Convenor of DLMC would propose the names of Agri. Officer/Revenue officer/Asst statistical officers who would assist AIC for assessment of loss.
As the assessment regarding post-harvest losses and Localized
calamities will be on individual basis, it is essential that affected farmers should submit claim intimation to AIC and concerned bank within 48 hrs.
C)Disputed claims / sub-standard claims, if any will be referred through
SLCCCI to GOI for consideration by insurance company; and decision of GOI in case of any interpretation of provisions of scheme or disputes will be binding on State Govt. /AIC / Banks and the farmers.
Claims paid for localized risks, post- harvest losses and on account payment shall be adjusted with the claims payable on the basis of yield data, if any, at the end of the season.
(9) Bank Service Charges
The Nodal Banks shall be paid Service charge @ 2.50% of premium paid by the farmer
10) The role of various agencies/Government Department, AIC shall be as defined and explained in the scheme and modalities.
11). The Certified Crop yield data for insured crops /unit areas and individual CCES-wise shall be provided by DES of Govt.of A.P alone and not by any other Department
12). The Weather Data of APSDMS of Government of A.P /State Rain gauge stations of Planning Dept./IMD shall be used to arrive at the percentage of loss for adhoc settlement of Claims .If possible the weather data shall be used for indemnification under prevented sowin
13) District level monitoring committee (DLMC) will be set up under the Chairman ship of District Collector ,JDA shall be convenor, other members from lead bank, CPO ,revenue Dept. and AIC. DLMC is to monitor the coverage, improve publicity awareness , facilitates submission of fortnightly weather and crop condition data ,coordinates the loss assessment by the joint group and review of implementation
14) IMPORTANT CONDITIONS/CLAUSES APPLICABLE FOR COVERAGE OF RISK:
a)The risk commences only after the receipt of premium and necessary declarations /proposals from the banks or the insurance intermediary or the authorized agent of the AIC .Therefore the banks
/insurance intermediary, channel partner or authorized agent should ensure reporting and remittance of premium promptly. Any loss of
declarations/instruments in transit due to negligence by these agencies or non-remittance of premium by these agencies, AIC shall not liable for payment of claims.
(b) In case of any misreporting by nodal bank /branch in case of Compulsory farmers coverage, concerned bank only shall be liable for such misreporting.
(c) Banks shall display list of beneficiary farmers with claim amount (who are eligible for claims) at village panchayat office.
(d) Insurance company will have discretion to accept or reject any risk of an insurance unit(s) for any crop(s) considering prevailing agricultural situation.
Mere sanctioning / disbursement of crop loans and submission of proposals/
declarations and remittance of premium by farmer / bank, without explicit intent to raise the crop, does not constitute acceptance of risk by insurance
(e) In event of near total crop failure during early or mid season affecting entire insurance unit, AIC shall adopt a graded scale indemnity settlemen
restricting indemnity to proportion of input cost upto that stage. Graded scale shall be worked out by insurance company in consultation with State Government. Wherever necessary, services of expert agencies may be availed, by AIC for arriving at graded scale of payment.
(f) AIC, if deemed necessary, will investigate coverage on its own or by an agency appointed for the purpose and may utilize technologies, including
satellite imagery for identification of anomalies in crop insurance coverage vis-à-vis actual field conditions. Upon identification of adverse phenomenon
based on such investigation, AIC has the right to scale down sum insured. In such cases no refund of premium paid by farmers shall be made by AIC.
g) In case of Prevented sowing failure, the insurance cover will cease in tht
notified area for that crop where claims arise and settled .
15. Withdrawal of NAIS and service tax
NAIS is withdrawn for those area(s) / crop(s) of district(s) where the pilot MNAIS is being implemented. Pilot MNAIS is implemented as a replacement for NAIS, and hence exempted from Service Tax similar to NAIS
16. Notification of calamity year:
2009-10 has been declared as calamity year and excluded for T.Y
1. Table – 1
2. Table – 1(A)
3. Annexure I(a)