Chief Minister Jayalalithaa told Prime Minister Manmohan Singh that NCIP had been introduced by Centre ‘in a very hasty manner without any consultation with stakeholders,’ with state governments and farmers not being taken into confidence.

The Centre's move to implement NCIP without proper consultation with stakeholders, especially state governments, had come as a ‘rude shock’ to farmers, she said.

In Tamil Nadu, the state government extends a subsidy of 45-50 percent on the premium payable besides 50 percent of the crop loss compensation shareable with the Government of India over and above the premium collected, she informed Singh in a letter.

The new measure will result in an ‘enormous financial burden due to the steep increase in the crop insurance premium under the new programme.’

The state government extends 45 percent to 50 per cent premium as subsidy under National Agriculture Insurance Scheme (NAIS) to all farmers, in addition to the meagre 5 percent subsidy extended only to Small and Marginal farmers by Centre, she said.

NAIS guidelines stipulate premium level of two percent to 3.5 percent of the sum insured, depending on the season and crop, she said adding the state government extends 50 percent premium subsidy, enabling the farmers to pay only one percent to 1.75 percent of sum insured.

In the new NCIP, premium payable by farmers increases to 3.75 percent and above under Modified National Agriculture Insurance Scheme, and to 4.8 percent and above under Weather Based Crop Insurance Scheme. "With such high premia, I really doubt whether farmers will come forward to insure their crops and mitigate their risks," she said.

Jayalalithaa said the state's farmers were already facing acute hardship due to severe drought in 2012-13 and deficit rainfall under Northeast monsoon this year. A ‘steep hike in premium burden’ at this juncture would adversely affect agricultural prospects and was ‘totally unacceptable’ to her government, she said.

She suggested that the additional burden of premium over and above two percent of the sum insured under the NCIP may be borne equally by the state government and the Centre without passing on the burden to the farmers.

This will go a long way in encouraging farmers to adopt crop insurance on a large-scale and enable them to mitigate their crop losses and continue their agricultural operations in a sustainable manner, she said and sought Singh's intervention to take a ‘speedy decision’ on her suggestion.


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