Date: 15/04/2023

Relevance: GS-2: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Key Phrases: Livestock Insurance Scheme, Parliamentary Standing Committee (PSC), crossbred and high-yielding cattle, High policy premium rates, comprehensive livestock and crop insurance, Animal Husbandry Ministry, Overlapping governance models.

Why in News?

• Recently, a Parliamentary Standing Committee (PSC) raised concerns about the zero-insurance coverage of livestock in 2022-23.
• In response, the Centre is considering a comprehensive livestock insurance scheme, modeled on the Prime Minister’s Fasal Bima Yojana.

Current Status of Livestock Insurance Scheme:

• The present Livestock Insurance Scheme, which is functional in 100 districts of the country, is being managed by the respective State Livestock Development Boards.
• However, less than 1% of the country’s cattle population is insured, and the average yearly premium is 4.5% of the insured amount.
• According to the panel's reports, not even a single livestock was insured during 2022-23, whereas in 2021-22, 174,061 animals were insured.

Key Issues with Livestock Insurance Scheme:

• High policy premium rates:
  • High policy premium rates deter many farmers from enrolling in livestock insurance schemes.
  • The average yearly premium is 4.5% of the insured amount, which is unaffordable for many farmers, particularly those from economically weaker sections.
• Need for comprehensive livestock and crop insurance :
  • Livestock insurance is crucial for farmers and the growth of the agriculture sector.
  • The recent Lumpy Skin Disease pandemic resulted in the death of two lakh cattle, leading farmers to demand compensation from the government.
  • A comprehensive livestock and crop insurance scheme covering all aspects of animal husbandry and agriculture is necessary to mitigate the impact of such pandemics.
• Overlapping governance models:
  • Farmers are often caught in the fight between State government officials and insurance companies. This leads to a delay in the settlement of claims and causes further hardship to farmers.
  • The current scheme is being managed by the respective State Livestock Development Boards, which leads to administrative delays and inconsistencies in the implementation of the scheme.

Recommendations by the Parliamentary Standing Committee:

• It recommended the Ministry to take effective steps to ease the process of livestock insurance.
• The Committee suggested exploring the possibility of developing an app-based Livestock Insurance facility for livestock owners.
• It also expressed concerns over the absence of insurance during 2022-23 and recommended the Ministry to take effective steps to make the process of insurance of livestock easy for beneficiaries.

The Proposed Livestock Insurance Scheme

• The Ministry is planning to roll out a comprehensive livestock insurance scheme, which will replace the present Livestock Insurance Scheme.
• The Ministry recently held a meeting with various insurance companies and other stakeholders to discuss the matter. The aim is to reduce the premium so that more farmers enroll in the scheme.
• The Centre is considering waiving off the premium for cattle rearers from Scheduled Caste (SC)-Scheduled Tribe (ST) communities, as high policy premium rates and general economic conditions of farmers are reasons for lower enrollment in such schemes.
• The Centre attempts to keep the premium low and ensure maximum coverage of livestock.
• The Ministry prefers direct transfer of benefits to farmers’ accounts. The direct transfer of benefits will make the process more transparent and easier for farmers.

Conclusion:

• Livestock insurance is crucial for the financial security of farmers engaged in livestock farming.
• The proposed comprehensive livestock insurance scheme aims to increase the coverage of livestock and reduce the premium rate.
• The recommendations of the Parliamentary Standing Committee and demands from farmers' organizations for comprehensive livestock and crop insurance highlight the need for a robust insurance scheme to protect the interests of farmers.

Source: The Hindu

Mains Question:

Q. Discuss the proposed comprehensive livestock insurance scheme and the measures taken by the Centre to increase enrolment in the scheme. Highlight the concerns raised by the Parliamentary Standing Committee on Agriculture and Animal Husbandry and suggest ways to address them.