Weather Based Crop Insurance Scheme
In 2015-16, the Weather-based Crop Insurance Scheme (WBCIS) is being implemented as component of National Crop Insurance Programme (NCIP). This scheme provides insurance coverage and financial support to the farmers in the event of failure of crops due to Adverse Weather Incidence and subsequent crop loss. This simply implies that if a farmer did not insure his crop under MNAIS but somehow his crops were damaged due to adverse weather conditions; he is still able to claim insurance if he goes with this component.
Adverse Weather Incidences
The Adverse Weather Incidences leading to crop loss and subsequent indemnity under WBCIS are as follows:
- Rainfall – Deficit Rainfall, Unseasonal Rainfall, Excess rainfall, Rainy days, Dry-spell, Dry days
- Relative Humidity
- Temperature – High temperature (heat), Low temperature (frost)
- Wind Speed
- A combination of the above
- Hailstorms and cloudburst
The scheme covers major food crops such as cereals, millets & pulses, Oilseeds and commercial / horticultural crops. Crops are selected and notified by State Governments.
This scheme is available to all kinds of farmers, big or small; loanee or non-loanee; Landholders, sharecroppers or tenant farmers. However, loanee farmers i.e. those who have taken farm-loans from financial institutions are covered compulsorily. The scheme gives the freedom to farmers to choose insurance companies. Further, role of PRIs (Panchayati Raj Institutions is encouraged in implementation of this scheme)
Reference Unit Area & Premium / sum assured calculation
The scheme operates on the concept of “Area Approach” i.e., for the purposes of compensation, a ‘Reference Unit Area (RUA)’ is defined by state government as a homogeneous unit of Insurance. Such RUA can be a Village Panchayat / Revenue Circle / Mandal / Hobli / Block / Tehsil etc. as defined by the state government. The Sum Insured (SI) for each notified crop is pre-defined as per a formula, which is based on the ‘cost of production’ and is same for loanee and non-loanee farmers and all companies. This sum assured is arrived at by using a formula.
This RUA shall be notified before the commencement of the season by the State Government and all the insured cultivators of a particular insured crop in that Area will be deemed to be on par in the assessment of claims. Each RUA is linked to a Reference Weather Station (RWS), on the basis of which current weather data and the claims would be processed. Adverse Weather Incidences, if any during the current season would entitle the insured a payout, subject to the weather triggers defined in the ‘Payout Structure’ and the terms & conditions of the Scheme. The “Area Approach” is as opposed to “Individual Approach”, where claim assessment is made for every individual insured farmer who has suffered a loss.
The Premium is decided by the insurance companies on RUA level and there is a cap on maximum premium as with MNAIS. The farmers are eligible for premium subsidy and difference between actuarial rates and premium actually paid by farmers are borne by the Government (both Centre and State concerned on 50:50 basis).
Key differences between MNAIS and WBCIS
- MNAIS specifically indemnifies the cultivator against shortfall in crop yield, WBCIS indemnifies against the crop loss due to adverse weather incidences as given above.
- MNAIS is on Individual approach, where claim assessment is made for every individual insured farmer who has suffered a loss. WBCIS is on area approach where sum assured is pre-defined.