The government is formulating a livestock insurance scheme to compensate farmers and landless peasantry for losses because of untimely death of animals on account of disease or natural disasters.
The scheme will be applicable to the high milk-yielding crossbred cattle and buffaloes to begin with but will be extended subsequently to all other bovines, including goats, sheep, pigs and others.
The animal husbandry department of the agriculture ministry has already prepared the broad outlines of the scheme and is discussing the finer details with the Planning Commission and insurance companies.
It is slated to become operational during the current Plan itself as it forms a part of the common minimum programme of the United Progressive Alliance government.
The department is negotiating with public sector general insurance companies and a few private companies the financial and practical aspects of the scheme. These include the amount of premium to be charged from livestock owners and incentives to be paid to insurance agents and others involved in the implementation of the programme.
The fees to be paid to veterinarians for identifying the cattle for insurance, tagging them and giving certificates for the purpose of claims is also being discussed with insurance companies. The issue of subsidy to be provided on the insurance premium, too, is yet to be finalised.
The new scheme will attempt to rectify the flaws in the pilot central sector livestock insurance scheme implemented in eight select districts from 2000 to 2004 for the cattle owned by families below the poverty line.
This scheme was discontinued as it failed to meet the target of covering 50,000 animals because of several drawbacks in its format and implementation.
The major reason for the failure of the scheme was the inability of the poor to pay 2.25 per cent premium at one point of time. Besides, the procedure of obtaining insurance cover and settlement of claims was too cumbersome for the rural poor.
Lack of any incentive for the insurance agents as well as the veterinary practitioners made it difficult to meet the target. Only around 10,000 animals could be covered under it.
Moreover, the non-coverage of small animals like sheep and goat, which are generally maintained by the majority of the BPL families, made the scheme unattractive for them.
Learning lessons from this, the new scheme intends to provide adequate incentives to the insurance agents and veterinarians to convince the livestock owners to go in for insurance cover for their animals. Unemployed educated rural youth, especially veterinarians and agricultural graduates, would be roped in for the implementation of the programme.
Significantly, the insurance business is proposed to be linked with the on-going Centrally-sponsored National Project for Cattle and Buffalo Breeding. This is because the high-yielding animals being bred under this scheme need the insurance protection the most. The funding for the scheme, including subsidy on the premium, is proposed to be routed through the NPCBB.
For the new scheme to be successful, it is felt necessary that the premium is fixed at a reasonable level, within the reach of the cattle owners as also commercially viable for the insurance companies.
As such, it is unlikely to be less than five to six per cent for a three-year policy though the government is negotiating with the insurance companies to keep it to the minimum.
The annual premium charged under the earlier cattle insurance scheme was 2.25 per cent for the animals belonging to the BPL families and around four per cent for small and marginal farmers.
Since agriculture, including animal husbandry, is a state subject, the Centre feels that the subsidy should be paid by them either fully or partly. A final decision on this aspect is still pending.
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