[Assam] Insurance for farmers.

[Roy, Santanu]

One of the important social instruments that can enable farmers to endure fluctuations in output caused by weather and other natural factors is the provision of insurance. Some of the problems of monitoring actual performance of crops and other moral hazard issues in rural India imply that private insurance companies may not serve such markets or if they do, charge exorbitant prices. I understand that, at least on paper, a central government sponsored national agricultural insurance scheme covering Assam has been in operation since 1999-2000 - that subsidizes and promotes provision of such insurance for a number of rabi and Kharif crops as well as some commercial crops. Its supposed to work through branches of public sector "commercial" banks and the gaon panchayat. The insurance premiums are not too bad - around 2 - 3 % of insured amount for most food crops - with 50% subsidy for small and marginal farmers. However, the scheme appears to have made little headway in Assam - I think less than 20,000 farmers are covered - a miniscule. I wonder if anyone knows the ground reality regarding agricultural insurance in Assam and the real bottlenecks there. 

Santanu.