1.

Due to insufficient of fund the state govt has failed to implement the crop insurance(pilot
scheme).
2. Premium – the cost paid by the (money) Farmer.
3. The govt of India desire to start two pilot schemes to protect the farmer from the economic
losses and financial losses.
4. Since from 1948 the GOI decided to protect the farmer from economic and financial losses.
5. According to the expert committee of Daram Narayan rejected the possibility of
implementing the crop insurance in india.
6. They have given the report totally opposite to the implementation of crop insurance in india.

1. Area based crop insurance was introduced in 1979and it was implemented in 12 states upto
1984.
Threshold yield is the average of last five years yield. (80% annual yield of last 5 years yield)
Short fall yield is the difference between the threshold yield and the actual yield.
The CCIS provide the financial support to the farmer who is suffering from crop failure.
Pre-Independence

As far back as 1915 in the pre-independence era, Shri J.S. Chakravarthi of Mysore
State had proposed a rain insurance scheme for the farmers with view to insuring
them against drought. His scheme was based on, what is referred to today as the
area approach. He published a number of papers in the Mysore Economic Journal
enunciating the concept of Rainfall Insurance. In 1920 Shri Chakravarthi published a
book titled “Agricultural Insurance: Practical Scheme suited to Indian Conditions”.

Apart from this, certain princely states like Madras, Dewas, and Baroda, also made
attempts to introduce crop insurance relief in various forms, but with little success.
Post-Independence
After the attainment of Independence in 1947, crop insurance gradually started to
find mention more often. The Central Legislature discussed the subject in 1947 and
the then Minister of Food and Agriculture, Dr. Rajendra Prasad gave an assurance
that the government would examine the possibility of crop and cattle insurance, and
a special study was commissioned for this purpose in 1947-48.

First ever Crop Insurance scheme - 1972

The first crop insurance program was introduced in 1972-73 by the

'General Insurance' Department of Life Insurance Corporation of India on
H-4 cotton in Gujarat. Later, the newly set up General Insurance
Corporation of India took over the experimental scheme and subsequently
included Groundnut, Wheat and Potato and implemented in the states of
Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka and West
Bengal.
Pilot Crop Insurance Scheme (PCIS) - 1979

Professor V. M. Dandekar, often referred to as the “Father of Crop Insurance in

India”, suggested an alternate “Homogeneous Area approach” for crop insurance in
the mid-seventies.
Based on this Area approach, the General Insurance Corporation of India (GIC)
introduced a Pilot Crop Insurance Scheme (PCIS) from 1979. Participation by the
State Govts. was voluntary. The scheme covered cereals, millets, oilseeds, cotton,
potato, gram and barley. The risk was shared by GIC and the respective State Govt.
in the ratio of 2:1. The insurance Premium ranged from 5 to 10 per cent of the Sum
Insured.

This PCIS ran till 1984-85 by which 13 States had participated. The scheme covered
6.27 lakh farmers for a Premium of 1.97crore against claims of 1.57 crore.
Comprehensive Crop Insurance Scheme (CCIS) - 1985

Based on the learnings from PCIS, the Comprehensive Crop Insurance Scheme
(CCIS) was introduced with effect from 1 st April 1985 by the Government of India with
the active participation of State Governments. The Scheme was optional for the
State Governments. The CCIS was implemented on Homogeneous Area approach
and was linked to short-term crop credit, that is, all crop loans given for notified crops
in notified areas were compulsorily covered under the CCIS.

The salient features of the Scheme were:

1. It covered farmers availing crop loans from Financial Institutions for growing
food crops & oilseeds on compulsory basis. The coverage was restricted to 100%
of crop loan subject to a maximum of ` 10,000/- per farmer.
2. The Premium rates were 2% for Cereals and Millets and 1% for Pulses and Oil
seeds. 50% of the Premium payable by Small & Marginal farmers was subsidized
by Central and State Governments in equal proportion.
3. Premium & Claims were shared by Central & State Government in 2:1 ratio.
4. The Scheme was optional to State Governments.
5. The maximum Sum Insured was 100% of the crop loan, which was later
increased to 150%.
6. CCIS was a multi-agency scheme, involving Government of India, Departments
of State Governments, Banking Institutions and GIC.

15 States and 2 UTs had participated in the CCIS during its tenure from Kharif 1985
to Kharif 1999. These were Andhra Pradesh, Assam, Bihar, Goa, Gujarat, Himachal
Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Meghalaya, Orissa,
Tamil Nadu, Tripura, West Bengal, Andaman & Nicobar Islands and Pondicherry.
The States of Rajasthan, Uttar Pradesh, Jammu & Kashmir, Manipur and Delhi had
initially joined the Scheme but opted out after few year

Pilot Scheme on Seed Crop Insurance (PSSCI) - 2000

A Pilot Scheme on Seed Crop Insurance (PSSCI) was introduced in Kharif 2000
season in 11 States to provide financial security & income stability to the Seed
Growers in the event of failure of seed crop.
Farm Income Insurance Scheme (FIIS) - 2003

NAIS protects the farmers only against the yield fluctuations. The price fluctuations
are outside the purview of this scheme. Farmers' income is a cumulative function of
yield and market prices. In other words, a bumper harvest tends to bring down the
market prices of grains and vice versa.

Therefore, despite normal production, farmers often fail to maintain their income
level due to fluctuations in market prices. To take care of variability in both the yield
and market price, the government introduced a pilot project, viz. Farm Income
Insurance Scheme (FIIS) during Rabi 2003-04 season.

The objective of the scheme was to protect not only the income of the farmer, but
also to reduce the government expenditure on procurement at Minimum Support
Price (MSP).

FIIS was implemented on the basis of 'homogeneous area' approach in respect of

rice and wheat crops only. The scheme was compulsory for loanee farmers and
voluntary for non-loanee farme` The premium rates were actuarial, determined for
each State at the District level, to be subsidised by the Govt. of India.