Revenue Insurance Scheme for Plantation Crops
This topic covers information about Revenue Insurance Scheme for Plantation Crops
The Revenue Insurance Scheme for Plantation Crops (RISPC) is a Department of Commerce scheme for protecting growers of tea, coffee, rubber, cardamom and tobacco from the twin risks of weather and price arising from yield loss due to adverse weather parameters, pest attacks etc. and from income loss caused by fall in international/domestic prices through crop insurance mechanism.
The duration of the pilot scheme shall be one crop cycle commencing from the year 2016-17 which may spread over 2 years.
Coverage of the scheme
- The Insurance premium subvention under RISPC is for small growers of Rubber, Tea, Coffee (Robusta and Arabica), Tobacco and Cardamom (small and large) having 10 ha. or less landholding. The scheme will be applicable to mature standing crops only.
- The Scheme is compulsory for growers registered with the respective Commodity Boards (CBs) in the pilot districts/member growers availing themselves of benefits under other schemes of Government through CBS and/or growers availing themselves of loans from public financial institutions/bodies including the CBS.The Scheme is optional for other small growers. Large growers can also participate in the scheme by paying the the actuarial premium as they are not eligible for premium subsidy.
- The scheme would be implemented initially on pilot basis in selected eight districts of seven States. The total number of small growers expected to be covered are around 1.8 lakhs with all area coverage of around 2.10 lakh hectares.
- The scheme will operate on the principle of 'Area Approach' in the selected districts. Commodity Board, in consultation with the concerned State Government shall designate an area as Insurance Unit (IU), which can be a village/village panchayat or any other equivalent unit.
- Scheme will cover income loss arising out of yield loss /price fluctuations or both. Yield loss can be due to non-preventable risks viz., drought, dry spells, flood, inundation, pest and diseases, landslides, natural fire, lightening, storm, hailstorm, cyclone etc. Price fluctuation can be due to fall in international/domestic prices below the average price of last 5 years excluding the current year.
- Losses arising out of war and nuclear risks, malicious damage and other preventable risks are excluded.
List of 8 Pilot Districts under RISPC
|Crop||State||Pilot District||No.of growers (upto 10 Ha)||Area Covered (Ha)|
|Tea||Tamil Nadu||Coonoor (Nilgiris)||38311||27000|
|Tobacco||Andhra Pradesh||West Godavari||11424||24406|
|Cardamom (Large)||Sikkim||East Sikkim||5200||6204|
Methodology for Implementation:
- At least two months prior to the commencement of the crop season, Commodity Boards in consultation with the concerned State Government shall convene a meeting of all stakeholders to finalize the terms and conditions, issuance of bid notice and select Insurance Companies to carry out implementation of the pilot scheme during file insurance period.
- Adequate publicity shall be given in all villages of the pilot districts using all possible means of electronic and print media, grower's fair, exhibitions, SMS, short films, and documentaries etc. The Commodity Boards in collaboration with lnsurance Companies and concerned State Governments shall organize training/ workshops/ sensitization programmes.
- Commodity Board shall provide 5 years authentic historical yield and price data to Insurance Companies for calculations of indemnity limits, premium rates etc. in respect of insurance units, If the data is not available, data at next higher unit /weighted average of contiguous units shall be given.
- Till standardised yield estimation method is finalized in consultation with NSSO, IASRI etc., during the pilot period, the existing method of yield estimation by the Commodity Boards or methodology acceptable to Commodity Boards/ Insurance Companies and growers shall be applicable.
- The Average price shall be based on average domestic-auction/international auction/Indicator price of last 5 years depending upon the crop. Before the commencement of the crop season, in consultation with stakeholders the Commodity Boards shall decide the modalities, mechanisms and work out the average price of the insured crops.
- Indemnity for the calculation of Sum Insured which shall not be below 80% shall be fixed by the respective Commodity Board. The average yield of the insured crop in an Insurance Unit shall be taken as equal to the average yield of last 5 years excluding the current year. Average Income is equal to Average yield (per ha of last 5 years) X Average price (Rs./ ha of last 5 years). Sum Insured in respect of a crop shall be average income of past five years multiplied by applicable indemnity level for that crop.
- The rate of insurance premium payable by the Government of India (through Commodity Boards), State Government and growers is in the ratio of 75:15:10. In case the State Government in the area/region covered by the scheme does not contribute its share of premium, the share of premium by growers shall increase to that extent.
- Commodity Board, in consultation with the State Government, shall also ensure the circulation to all concerned agencies/ Departments at least 1 month in-advance of the commencement of the crop season the necessary details Incorporating all essential details about insured crops, areas, sum insured, premium rates for farmers, Government subsidy, seasonality discipline (cut- off dates) for each activity etc. This shall be done digitally and uploaded on the website of the Boards, State Governments and the Insurance Companies also.
- Commodity Boards shall provide seasonality discipline (time-limit/cut-off date) for following activities under the scheme :
If Average Income is calculated as Rs,2,00,000 per Ha (based on last 5 years moving average of yield and price) and Indemnity level is predefined to 90% :
(All amounts in Rs/Hectare)
Sum insured = Rs 2,00,000 X 90/100 = Rs 180000/-.
Premium quoted by Insurance Company =5% of sum Insured (SI) =Rs 9000/-
If actual income =Rs 1,60,000/-
Claim amount payable to grower =Sum Insured minus actual income = Rs 1,80,000 -1,60,000 = Rs 20,000/Ha
If actual income is equal to or more than the Sum Insured in an insurance unit, growers are not eligible for any payment during the crop insurance period. The Insurance Companies will work out premium on the Sum Insured (SI) and will declare the same for each crop.
- Submission of insurance proposals by growers to bank branches/PACS/ Regional offices of Commodity Boards etc;
- Submission of consolidated proposals by the Regional Offices of Commodity Boards/Bank branches/Primary Agriculture Cooperative Societies (PACS) to Commodity Boards/ Nodal Banks;
- Submission of consolidated proposals to Insurance Companies by the Commodity Boards/ Nodal Banks;
- Submission of yield/ price data by the Commodity Boards to Insurance Companies,
- Settlement of claims by Insurance Companies.
- Online payment of admissible claims to Nodal Banks by Insurance Companies,
- Crediting of admissible claims to growers' account by Bank branches/ PACS.
- Placing of list of insured growers in the notice board of the bank branch/PACS both digitally and manually for information
- Uploading of details of beneficiaries on the website of Commodity Boards and Insurance Companies.
beneficiaries shall also be uploaded on the website of the Commodity Boards / Nodal Banks/ Insurance Companies immediately.