Consultation on National Crop Income Insurance Scheme –

To:

Shri Radhamohan Singh,

Hon’ble Agriculture Minister,

Government of India.

Dear Sir,

Sub: Consultation on National Crop Income Insurance Scheme –

Ref: Dept of Agriculture & Cooperation’s letter dated No. 13015/01/2014-Credit II, dated 16th February 2015 and letter dated 19th January 2015

Sir, we welcome your effort to initiate pilots around Crop Income Insurance by recasting the earlier Farm Income Insurance Scheme of 2003-04, by removing some of its acknowledged shortcomings. The proposal to look at income insurance through one comprehensive product but separate calculations of yield risk coverage and price risk coverage is indeed welcome and BKU would like to congratulate the government for beginning some thinking along these lines.

Sir, we have some feedback to provide on the “Draft Pilot National Crop Income Insurance Scheme (NCIIS) for insuring the farmers against both yield and price fluctuation of farm produce”.

1.   There are some regions in India where the cropping systems as well as the lack of market infrastructure and mechanisms necessarily end up in endemically low incomes for farmers. Some coarse-millet cultivating regions with no market support mechanisms, for example. The pilot should also have an element where the guaranteed income in the scheme should be against minimum living incomes, and not just rolling averages of yields or MSP, where data can be collected using the same mechanisms as proposed in this FCIIS. Calculation of minimum living incomes should not be difficult given that India has the expertise and experience of laying down minimum wages as well as prescribing minimum salaries through Pay Commissions. Similarly, data on yields at the Gram Panchayat level and on farm gate prices can also be easily compiled. Data on prices is already being collected in the DES Comprehensive Scheme which forms the basis for CACP’s MSP recommendations. The same scheme could be used in a more expansive fashion to ensure that minimum living incomes accrue to insured farm households.

2.   The proposals talk of capping the risk of loss in income due to fluctuating prices of the crop only to the extent of 20% as compared to MSP. This is not understandable. It should be any actual difference between MSP and the market price realised.

3.   Further, even in the calculation of claims and formula for the same, it is proposed that yield figure in price indemnity would be restricted to threshold yield, even though average yields data is available. The average yields excluding calamity years should be taken as a basis for this. (Point 6.1 on Price Component under Concept of 6. Income Insurance, in the note circulated).

4.   Total Indemnity or Claim = Shortfall in Guaranteed Price + Shortfall in Guaranteed Yield is welcome.

5.   While measuring of the market price is being proposed at district and state level possibly given the data unavailability, all attempts should be made to capture more localised information.

Thanking you for giving us an opportunity to present our feedback to these proposals,

Sincerely,

Ch. Rakesh Tikait

National Spokesperson (BKU)