Overview on Agricultural Insurance: INDIA 1. Agricultural Insurance Market Review
History of Agricultural Insurance
Crop insurance began in 1972 on a pilot basis. India has implemented subsidized public-sector “area-yield index” multi-peril crop insurance (MPCI) since 1979. In 1985 the Comprehensive Crop Insurance Scheme (CCIS) was introduced in sixteen states and two union territories by the General Insurance Corporation of India (GIC). The CCIS was provided only to recipients of crop credit (loanees) on a compulsory basis. The CCIS was replaced by the National Agricultural Insurance Scheme (NAIS) in the Rabi season 1999-2000. The NAIS was closely modeled on the CCIS area-based approach. The objectives of this subsidized national crop insurance scheme are threefold: (a) to provide a measure of financial support to farmers in the event of crop failure as a result of an insured peril; (b) to restore the credit eligibility of the farmer after a crop failure for the next season, and (c) to support and stimulate the production of cereals, pulses, and oilseeds.
Livestock insurance was introduced in the late 1960s but assumed importance only after the general insurance industry was nationalized in 1972.