Uttar Pradesh, India (PressExposure) August 28, 2009 -- Agricultural Insurance Company of India, the government run insurance company which covers the risk of agricultural losses in the country is going to witness a tough time ahead as it is supposed to pay the claims for the crop failure caused by the rain deficit in the country.
The company is supposed to pay out Rs.1,000 crore to 12 states under the weather based insurance scheme (WBIS) for which the states have paid the premium of more than Rs.100 crores. The states like Maharashtra, Gujarat, Chattisgarh and Madhya Pradesh are also included in this.
AICI has to give out a big amount of money to the states as some districts in Gujarat are hit by the huge rain deficit and if the action gets delayed then the crop production can come down in excess.
WBIS insurance is different from crop insurance because it makes use of weather parameters in order to compensate with the farmers.
The DGM of AICIL K N Rao said that the amount of claims is decided according to the rainfall data provided by the government agencies. The difference between the observed and the expected value of rain helps the company to decide compensation.
Gujarat's Tribal Department has subscribed for the insurance ([http://www.paisawaisa.com/insurance/]) cover of Rs.63.40 crore for the first time. This subscription is aimed at providing the cover to 1.4 lakh maize crop project farmers.
The secretary of Gujarat Tribal Department, AM Tiwari said that total 60% fall in crop is expected due to the rain deficit in the state.
The regional manager of AICI, Kishore Kumar said that the company has collected the total premium of Rs.6.99 crore from the Tribal Department and has already started with the pay out process. The company has already paid Rs.3.9 lakh in Mangrol taluka of Kutch district due to the less rainfall there.
The Manager of AICI, Ajay Singhal said that the company has yet to estimate the amount to be paid in some regions.