High premium, poor coverage: Centre mulls rehaul of livestock insurance scheme

The panel said in the report that not even a single livestock was insured during 2022-23, whereas during 2021-22, 1,74,061 animals were insured.

Pulled up recently by a Parliamentary Standing Committee (PSC) for zero insurance coverage of livestock in 2022-23, the Centre is considering a comprehensive livestock insurance scheme modelling the Prime Minister’s Fasal Bima Yojana. The Union Animal Husbandry Ministry’s move is to roll out the scheme ahead of the 2024 Lok Sabha elections. There are initial proposals to waive off premium for cattle rearers from Scheduled Caste (SC)-Scheduled Tribe (ST) communities. At present, less than 1% of the country’s cattle population is insured and the average yearly premium is 4.5% of the insured amount.

The Animal Husbandry Ministry recently held a meeting with various insurance companies and other stakeholders on the matter. “Our effort is to reduce the premium so that more farmers enroll in the scheme,” an official said, adding that a comprehensive livestock insurance will replace the present Livestock Insurance Scheme. The scheme is functional in 100 districts of the country. The Centrally-sponsored scheme is being managed by the respective State Livestock Development Boards.

Recently, the Animal Husbandry Ministry had told the PSC on Agriculture and Animal Husbandry that farmers are often caught in the fight between State government officials and insurance companies. A report submitted to Parliament by the panel on Demands For Grants of the Ministry quoted an official and said the Ministry prefers direct transfer of benefits to farmers’ accounts.

The panel said in the report that not even a single livestock was insured during 2022-23, whereas during 2021-22, 1,74,061 animals were insured. “The Committee were informed of the hardships faced by the livestock owners in getting their livestock insured and also about the measures being taken to ease the process of livestock insurance. Expressing concern over no Insurance during 2022-23, the Committee recommended the Ministry to take effective steps so that the process of insurance of livestock is made easy for the beneficiaries. “The Committee would also like the Department to explore the possibility of developing an App-based Livestock Insurance facility for livestock owners. The Committee would like to be apprised of the total progress made by the Department in this regard,” the report added.

The official said high policy premium rate and general economic conditions of farmers are reasons for lower enrollment in such schemes. “The government considers subsidy on the premium paid by socially marginalised farmers from SC-ST communities,” the official added. In the meeting with insurance companies, the Centre stressed on the importance of expanding the ambit of the scheme and decreasing the premium paid by the farmers.

During the Lumpy Skin Disease pandemic, about two lakh cattle died in the country. Farmers had demanded compensation from the government for the loss. The Centre’s attempt is to keep the premium low and ensure maximum coverage of livestock. “The coverage at present is very poor as most of the farmers are not in a position to pay premium. Some exquisite cattle breeds are insured by the breeders, but the government wants to insure more animals,” the official added. Several farmers’ organisations had also demanded comprehensive livestock and crop insurance in the background of pandemics such as lumpy skin disease.