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To aid farmers, Rajasthan may launch own crop insurance firm
Rajasthan agriculture minister Prabhu Lal Saini said the crop insurance company has been initiated in farmers’ interest, and issues such as delay in release in compensation, claims of wrong assessment etc would be addressed at the state level.
The Vasundhara Raje-led BJP government is examining the feasibility of launching a ‘Rajasthan Agriculture Crop Insurance Company’ within this year, which may be a first among Indian states.
Agriculture minister Prabhu Lal Saini said, “The state government is working on launching its own crop insurance company. The move has been initiated in farmers’ interest, if it materialises then issues such as delay in release in compensation, claims of wrong assessment etc would be addressed at state level.”
He said that since a government works in public interest, a state-run company would take decisions that benefit farmers, and loss and profit of the company would be of the government.
“The chief minister is serious over the issue and the department is working on it. The licence authority is Insurance Regulatory and Development Authority (IRDA), we are examining the rules and regulations,” he said.
The minister said the union ministry of agriculture and farmer welfare has agreed in-principle to the state’s proposal.
“Some states are of the view that the empanelled insurance companies are making huge profits and paying less claims and expressed their desire to float their own crop insurance company to take the benefit of less claims during good/normal crop years and to make reserve for future high claims,” the union agriculture department said in its letter responding to the proposal.
The ministry has no objection ‘in principle’ to the floating of crop insurance company subject to the condition that the state shall adopt transparent and competitive bidding process to determine the actuarial premiums to be charged for coverage of risk under Pradhan Mantri Krishi Fasal Bima Yojna and Restructured Weather Based Crop Insurance Scheme, the letter clarified.
A senior agriculture department official said on the condition of anonymity that the state is examining all aspects of setting up such a company, including the feasibility of a tie-up with an existing company at a lower profit margin. The process of getting the licence from IRDA is long, and requires the company to have paid up capital to the tune of 1.5 times of the total sum insured, he said.
