In order to target the two critical components of a farmer's income, namely, and yield and price, through a single policy instrument, the Department of Agriculture and Cooperation formulated the Farm Income Insurance Scheme (FIIS). This Scheme was conceived to provide income protection to the farmers by integrating the mechanism of insuring production as well as market risks. The main features of the scheme are given in Box. Initially the scheme has been taken up on a pilot basis in Rabi 2003-04 in 18 districts of 12 States for wheat and paddy. The premium rates under the scheme are based on actuarial calculations. The Government of India provide subsidy of 75 per cent of the premium for small and marginal farmers and 50 per cent for others. During Rabi 2003-04, a total of 1.8 lakh farmers were covered over an area of 1.9 lakh hectares. Premium amounting to Rs.14.1 crore was generated as against the sum insured of Rs.239 crore. Claims to the tune of 1.5 crore were paid for the season. The scheme continued during Kharif 2004 season also covering 20 districts in 4 states covering a total of 2.22 lakh farmers over an area of 2.02 lakh hectares. Premium amounting to Rs.15.68 crore was generated against a sum insured of Rs.177.56 crore.
Source: National Portal Content Management Team, Reviewed on: 11-01-2011