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  • W.B.C.S. Examination Notes On – National Agricultural Insurance – Agriculture Notes.

    India, an agrarian economy with one third population depending on the
    agriculture sector directly or indirectly has 116 million farm holdings covering an area of 163 million hectares of which small and marginal farmers (with holdings of 2 hectares or less) make up 80 percent of the producer population.Continue Reading W.B.C.S. Examination Notes On – National Agricultural Insurance – Agriculture Notes.

    Farming is an inherently risky business and farmers face many types of risks. About 60 per cent of net sown area of the country is rain-fed and 65 percent of Indian farmers depend on rain-fed irrigation.

    The growth of crops and realization of output are determined by the quantum of rainfall and its distribution during the Monsoon Season which at times is uncertain. Rainfall pattern affects the irrigated crops also. Nearly two third of the cropped acreage in India is vulnerable to drought in different degrees. This leads to operating risk in cultivation of different crops. On an average 12 million hectares of crop area is affected annually by these calamities severely impacting the yields and total agricultural production.
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    Agricultural production and farm incomes in India are frequently affected by natural disasters such as droughts, floods, cyclones, storms, landslides and earthquakes. Susceptibility of agriculture to these disasters is compounded by the outbreak of epidemics and man-made disasters such as fire, sale of spurious seeds, fertilizers and pesticides, price crashes, etc. All these events severely affect farmers through loss in production and farm income, and are beyond the control of farmers. With growing commercialization of agriculture, the magnitude of loss due to unfavourable eventualities is increasing. In recent times, mechanisms like contract farming and futures trading have been established which are expected to provide some insurance against price fluctuations directly or indirectly. But, agricultural insurance is considered an important mechanism to effectively address the risks to output and income resulting
    from various natural and manmade events.

    Salient Features of National Agricultural Insurance Scheme (NAIS)

     Loanee Farmers are covered on compulsory basis in notified areas for notified
    crops whereas for non-loanee farmers, the scheme was voluntary.
     Covers all the food crops (cereals, millets and pulses), oil seeds and annual
    commercial/horticulture crops, in respect of which past yield data is available for
    adequate number of years.
     The administered premium rates are charged which range from 1.5 percent to
    3.5 percent for food and oil seeds for normal sum insured and indemnity level.
     10 percent subsidy is available to small and marginal farmers.
     Central Government and State Governments shares on 50:50 basis of claims
    over and above 100 percent of premium collected in case of food crops and oil seeds, bank service charge and 20 percent of administrative expenses.
    The Scheme is optional for States/Union Territories (UTs) and it is being
    implemented by the 25 States and 2 Union Territories in one or more seasons. Since the inception of the Scheme 2211.43 lakh farmers for a premium of Rs.10,03,823 lakh against the claim of Rs.32,37,678 lakh are covered until 2013-14. The total area insured is 3323.18 lakh hectares during the same period.

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