Crop Insurance of Agricultural Inputs and Infra­structure


Crop insurance was introduced by the Gov­ernment of India in 1985. It is operated through the General Insurance Corporation of the State Govern­ment. Its basic objectives are: (i) to provide financial support to farmers in the event of a crop failure on account of natural calamities, (ii) to enable farmers affected by a crop failure to restore their eligibility for fresh borrowing from the institutional credit institutions, and (iii) to stimulate production of cere­als, pulses and oilseeds.

The sum insured in 100 per cent of the crop loan or a maximum of Rs. 10,000 per farmer. The insurance premium is 2 per cent of the sum insured for rice, wheat, and millets and 1 per cent for pulses and oil seeds which is deducted at the time of the disbursement of the loan. Small and marginal farmers pay only 50 per cent of the insur­ance premium the balance is paid as subsidy by the Centre and the States.

The crop-insurance scheme has covered 2.24 million farmers with 4.37 million hectares up to 1991. The sum insured was Rs. 646.7 crore over which Rs. 9.5 crore collected as premium.

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