Chennai:Tamil Nadu government has said the Centre’s “abrupt decision” to implement National Crop Insurance Programme from Rabi season 2013-14 will make farmers pay an increased premium and suggested that Central and state governments bear the additional “burden premium” of two percent.

Chief Minister Jayalalithaa told Prime Minister Manmohan Singh that NCIP had been introduced by Centre “in a very hasty manner” without any consultation with stakeholders,” with state governments and farmers not being taken into confidence.

The Centre’s move to implement NCIP without proper consultation with stakeholders, especially state governments, had come as a “rude shock” to farmers, she said.

In Tamil Nadu, the State Government extends a subsidy of 45-50 per cent on the premium payable besides 50 per cent of the crop loss compensation shareable with the Government of India over and above the premium collected, she informed Singh in a letter dated January 5, which was released today.

The new measure will result in an “enormous financial burden due to the steep increase in the crop insurance premium under the new programme.”

Due to state government’s encouraging more farmers to enroll in the earlier National Agriculture Insurance Scheme (NAIS), which, she said, had now been withdrawn, 9.76 lakh farmers had been enrolled in it as of 2012-13.

The State Government extends 45 per cent to 50 per cent premium as subsidy under NAIS to all farmers, in addition to the meagre 5 per cent subsidy extended only to Small and Marginal farmers by Centre, she said.

NAIS guidelines stipulate premium level of 2 per cent to 3.5 per cent of the sum insured, depending on the season and crop, she said adding the state  government extends 50 per cent premium subsidy, enabling the farmers to pay only 1 per cent to 1.75 per cent of sum insured.

In the new NCIP, premium payable by farmers increases to 3.75 per cent and above under Modified National Agriculture Insurance Scheme, and to 4.8 per cent and above under Weather Based Crop Insurance Scheme. “With such high premia, I really doubt whether farmers will come forward to insure their crops and mitigate their risks,” she said.

Jayalalithaa said the state’s farmers were already facing acute hardship due to severe drought in 2012-13 and deficit rainfall under Northeast monsoon this year. A “steep hike in premium burden” at this juncture would adversely affect agricultural prospects and was “totally unacceptable” to her government, she said.

She suggested that the additional burden of premium over and above 2 per cent of the sum insured under the NCIP may be borne equally by the State Government and the Centre without passing on the burden to the farmers.

This will go a long way in encouraging farmers to adopt crop insurance on a large-scale and enable them to mitigate their crop losses and continue their agricultural operations in a sustainable manner, she said and sought Singh’s intervention to take a “speedy decision” on her suggestion.

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