In India, China, Indonesia and many other countries, the main occupation of majority of the population is agriculture. It is a means of livelihood for millions of people living in the rural areas. Thus, in such a situation where farmers are the backbone of the economy of these countries, especially India, it is imperative that the Government makes some provisions for the welfare of these farmers. First of all the farmers belong to the economically weaker sections of the society. Their only source of livelihood is the meager earnings they make from the farming and related occupations. Besides this, good crops and profitable farming depends mainly on the natural factors like rains, sun and other weather conditions. Moreover, natural calamities also affect the crops and other farming businesses.
Thus, we see that the success of agriculture and related occupations depend mainly on the natural factors which are not in human hands, but at the same time they affect the very lives of the vast population in a very big way. The Government of India has launched various programmes for the benefit of small farmers, marginal farmers, agricultural labourers, etc. Since 1980, all these programmes have been integrated into Integrated Rural Development Programme(IRDP) which is funded by the Central and State governments on a 50-50 basis. The objective of the programs is to provide, to the target group of rural families, a package of assistance comprising income generating assets, working capital, etc. through subsidy, institutional credit, etc. Special insurance schemes are framed to protect the beneficiaries of IRDP projects. Under these policies, the rates of premium are lower and claims procedure is simplified. Whenever, the word "scheme" is used hereafter, it refers to these special policies.
Why are the Insurers obligated to the Rural Sector? Under the provisions of sections32B and 32C of the Insurance Act, 1938, the insurers are obliged to provide such percentages of business as may be specified by the Insurance Regulatory and Development Authority(IRDA) for persons in the rural sector or social sector, workers in the unorganized or informal sector and other categories of persons, as may be specified by the IRDA. The IRDA has, in accordance with the provisions of the above two sections of the Insurance Act, issued the Regulations, 2000, which lays down that every insurer transacting general insurance business, shall underwrite business in the rural sector, to the extent of at least 2% of total gross premium in the 1st financial year, at least 3% of the gross premium in the 3rd financial year and 5% of the gross premium in the third and further financial years. The obligations also include the insurance for crops. Now the question arises as to who is entitled to these benefits, as given the kinds of benefits provided by the insurers to the farmers. Some rules and laws have to be stipulated to define the Rural sector and a farmer who can be provided the benefits by the insurers. A rural sector has been defined as any place which, as per the last census, has a population of not more than 5000, density of population of not more than 400 per square kilometer, and at least 75% of the male working population engaged in agriculture.
Thus, to cater to the rural sector the insurers have brought about various policies after taking into consideration the conditions work in, the conditions they live in, the banes of the natural calamities and many other factors.
The rural policies comprise the insurances of:
Various livestock e.g., cattle, sheep, goat, etc.
Sub-animals e.g., silkworm and honeybee.
Plantation and horticultural crops e.g., rubber, grapes, etc.
Property e.g. agricultural pumpsets, etc.
Person e.g., gramin accident.
Market agreements were formulated by the four public sector companies insurances of cattle, sheep, goat, workhorses and camels, poultry etc.
Where there is no market agreement, the companies formulate their own policies, rates of premium, underwriting norms, etc. The title of these policies may vary from company to company but the cover may, broadly be similar.
Now let us discuss the various policies which come under the rural insurance:
Cattle insurance " The word "cattle" refers to animals like Milch cows between 2-10 years, milch buffaloes between3-12 years, stud bulls( both cow and buffalo species) which are between 3-8 years and bullocks which are between 3-12 years.
Cattle policy provides indemnity for death due to
various factors like
a) Accident( includes fire, lightening, flood, inundation, storm, hurricane, earthquake, cyclone, tornado, tempest and famine).
b) Diseases contracted or occurring during the period of the policy.
c) Surgical operations
d) Riot and strike
" Sheep and Goat insurance " The type of insurance for sheep and goat are more or less similar to the cattle insurance, however the exclusions may be specific to this policy.
" Poultry insurance ?" Poultry for the purpose of market agreement refers to the layers, broilers and the parent stock. The agreement specifies the age limits and number of birds to be insured. The rest of the insurance clauses are more or less the same as the cattle insurance. The sum to be insured and the premium likewise may vary. The underwriting considerations are also different.
" Silk worm insurance " This scheme is applicable to mulberry silkworms only of Univoltine, Bivoltine or Multivoltine breed. Only disease free layings are considered for insurance and the cover is from egg stage to cocoon stage.
" Honey bee insurance " This insurance applies to hives and or bee colony belonging to the co-operative society or individuals. The cover is in respect of all accidental loss of damage to the hive and/or bee colony. Theft risk can be covered on payment of additional premium.
" Inland Fish insurance scheme " This scheme is applicable to fish farms consisting of fry, fishlings, fingerlings, fish in stock ponds, breeders etc. in the pond and fresh water projects.There is no fixed sum insured under this policy because value of fish changes from stage of seed to adult fish. Many factors are considered to fix the premium for the sum insured.
" Horticulture/Plantation/Floriculture insurance" This covers the insurance for horticulture crops like grape, citrus fruits, chikoo, pomegranate, banana etc. , plantation crops like rubber, eucalyptus, poplar, teakwood, oilpalm plantations, all types of trees, sugarcane, tea etc. and floriculture includes different flowers. The policy is quite similar to the other farmers insurance.
Agriculture pumpset insurance - this insurance is in respect of unforeseen and sudden physical damage to pumpsets by various included in the schedule.
Finally there are many more types of insurance which give the farmers the confidence and support to carry on their occupations and to compensate at times of loss or failure of crops etc.
The insurance sector has been doing all it can to further the cause of the farmers who are the backbone of a country\'s economy.
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