Agriculture Insurance Company of India

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Agriculture Insurance Company of India Overview

Agriculture Insurance Company of India Limited (AIC) provide yield-based and weather-based crop insurance plans in 500 districts of India. Agriculture is the major contributor in Indian economy where the majority of the population depends on agriculture for their livelihood. With times the method of farming has evolved manifold and even the modern day farming techniques has also inducted to a larger extent Yet, agriculture in India is dependent largely on the weather and is severely impacted by its vagaries as also by attack of pests and diseases. These unpredictable and uncontrollable extraneous perils render Indian agricultural and extremely risky enterprise.

 It is here that the various insurance plans designed by Agriculture Insurance Company of India Limited play a critical role in anchoring a stable growth of the sector.

Agriculture Insurance Company Plans

Agriculture Insurance Company of India Limited through its Agricultural Insurance Plans also referred as National Agricultural Insurance Scheme (NAIS) or Rashtriya Krishi Bima Yojana – RKBY is completely dedicated to cater the need for protection of the agriculture crops and famers associated with it.

Plan objective

  • The plan aims to  cater the need of financial protection to the farmers against any loss or damage to their classified harvest as a result of natural calamities, pests & diseases.
  • This plan is intended to bring change in modern day farming techniques by educating  farmers to espouse high-yield farming practices, high value inputs and higher technology in Agriculture.
  • To create regular stream of income vis-à-vis high production and stabilize farmer’s economic conditions.

Key Feature of the Agricultural Insurance Company Policy

  • A significant protection plan for the agriculture sector providing financial support to the farmers in the event of crop failure and in maintaining flow of agricultural credit
  • Plan benefits are not only confined to the insured farmers, but, have a overall impact on the living standard of entire community directly and indirectly through spillover and multiplier effects in terms of maintaining production & employment.
  • Plans available for all farmers including sharecroppers, tenant farmers growing the notified crops in the notified areas.
  • Plan is available in two variants (a) On a compulsory basis & (b) On a compulsory basis .
  • Farmer who avails the Seasonal Agricultural Operations (SAO) loans facility from any financial Institutions has to enroll for the plan on a compulsory basis.
  • Other than such farmer, who haven’t availed any loan facility yet wants to have the insurance protection, can enroll for the agriculture insurance plans on a voluntary basis.
  • The plan is Currently available in 23 States and UTs
  • Plan Premium subsidy of 50% to Small & Marginal farmers.
  • Triple levels of Indemnity i.e. Low Risk, Medium Risk & High Risk as per allied risk depending on geographical location and based on Coefficient of Variation (C.V.) in yield of past 10 years data.
  • Independent monitoring and implementation done through General Insurance corporation (GIC) of India' for greater transparency and hassle free processing.
  • The plan is offered on Area Approach basis which classifies defined areas against each notified crop for widespread calamities
  • For cases of individual assessment, the same done on experimental basis for localized calamities, such as, hailstorm, landslide,cyclone and flood in certain pre-notified areas.
  •  The size of unit area varies from State to State and crop to crop.
  • The list of  defined area includes Block/ Mandal/Taluka / Patwari halka / Nyayapanchayat/ Gram Panchayat/ Village, etc.

Risks covered under the Agriculture insurance plan

The plan provides comprehensive risk insurance for yield losses due to:

  •  Any natural calamity such as Natural Fire and Lightening, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado Flood, Inundation and Landslide.
  • Any temporary or season based crisis such as Drought or Dry spells are covered in insurance plan
  • The plan offers risk coverage e for any other loss or damage due to Pests / Diseases etc.

Crops covered under Agriculture Insurance

  • The plan scope coverers currently 35 different crops during Kharif and 30 different Rabi season pan India. The crops are selected for insurance if the past yield data for 10 years are available, and the State government agrees to conduct requisite number of Crop Cutting Experiments (CCEs) during the proposed season and as per plan viability.
  • Food crops (Cereals, Millets & Pulses) such as Paddy, Wheat, Jowar, Bajra, Maize, Ragi, Korra, Kodokutki, Green gram, Black gram, Red gram, Horse gram, Gram, Moth etc.
  • Oilseeds such as Groundnut, Sunflower, Soya bean, Safflower, Castor, Sesamum, Niger etc are also covered in plan benefits
  •   Annual Commercial/Annual Horticultural crops such as Sugarcane, Cotton, Potato, Onion, Ginger, Turmeric, Banana, Pineapple, Jute, Tapioca, Chilli, Cumin, Coriander, Isabgol, Methi etc. 

Area wise Agriculture Insurance plan coverage details.


Crops Covered


Paddy, Jowar, Bajra, Maize, Ragi, Blackgram, Greengram, Redgram, Groundnut(I), Groundnut (UI), Castor, Sunflower, Cotton (I), Cotton (Un I), Sugarcane (P), Sugarcane ? Chilly (I), Chilly (UI), Banana, Soyabean, Redchilly, Onion


Ahu paddy, Sali Paddy, Jute, Boro Paddy, Wheat, Rape & Mustard, Potato, Sugarcane


Paddy, Maize, Chilly, Wheat, Chana, Masoor, Maize, Arhar, Rape & Mustard, Potato, Onion, Sugarcane, Jute


Paddy (UI), Kodo Kutki, Paddy (I), Soyabean, Groundnut, Arhar, Jowar, Sesamum, Maize, Wheat (UI), Wheat (Irr), Bengal Gram, R & M, Linseed, Potato


Paddy, Ragi, Groundnut, Sugarcane, Pulses


Bajra, Maize, Blackgram, Greengram, Tur, Banana, G.Nut, Ragi, Castor, Moth, Sesamum, Cotton, Wheat (I), Wheat (UI), R&M, Gram, Potato, S. G.Nut, S. Bajra, Potato Cumin, Isabgol, Garlic, Onion


Bajra, Maize, Blackgram, Greengram, Tur, Banana, G.Nut, Ragi, Castor, Moth, Sesamum, Cotton, Wheat (I), Wheat (UI), R&M, Gram, Potato, S. G.Nut, S. Bajra, Potato Cumin, Isabgol, Garlic, Onion


Bajra, Maize, Cotton, Arhar, Gram , Mustard


Paddy, Maize, Potato, Wheat Barley

J & K

Paddy, Maize, Wheat (I), Wheat (UI), Mustard


Paddy, Maize, Potato, Wheat, Rape & Mustard, Begal Gram, Potato


Paddy (I), Paddy (RF), Jowar (I), Jowar (RF) Bajra (I), Bajra (RF), Maize (I), Maize (RF), Ragi (I), Ragi (RF), Navane (RF), Save (RF), Tur (I), Tur (RF), Blackgram, Greengram (RF), Horsegram, Groundnut (I), Groundnut (RF), Sunflower (I), Sunflower (RF), Soyabean (I), Soyabean (RF), Sesamum (RF), Castor (RF), Potato (I), Potato (RF), Onion (I), Onion (RF), Cotton (I), Cotton (RF), Chilly (I), Chilly (RF), Paddy (I), Wheat (I), Wheat (RF), Bengal Gram,(I) Bengal Gram (RF), Safflower (RF), Safflower (I), Linseed


Paddy, Tapioca, Pine apple, Turmeric, Ginger, Banana


Paddy (I), Paddy (UN), Jowar, Bajra, Maize, Kodo Kutuki, Tur, G.Nut, Sesamum, Soyabean , Cotton, Banana, Wheat (I), Wheat (UN), Bengal gram, R& M, Potato, Onion


Paddy, Jowar, Bajra, Maize, Ragi, G.Nut, Sunflower, Soyabean, Sesamum, Niger, Tur, Urd, Moong,Cotton, Onion, Sugar Cane, Wheat (I), Wheat (UN), Jowar (I), Jowar (UN), Bengal Gram, Safflower, Sunflower, Onion


Ahu Paddy, Sali Paddy, Boro Paddy, Ginger, Potato, R & M


Paddy, Maize, G.Nut,.Red Gram,. Niger, Cotton, Mustard, Potato, Sugarcane


Paddy, Jowar, Bajra, Maize, Moong, Moth, Urd, Gnut, Cowpea, Soyabean, Arhar, Til, Castor, Guar, Wheat, Barley, Gram, Mustard, Taramira, Masoor, Coriander, Cumin, Methi, Isabgol. Sonf


Soyabean, Finger Millet, Maize, Aman Paddy, Ginger, Potato, Barley, Urd, Mustard, Wheat


Paddy, Ragi (UI), Ragi (I), Maize (RF), Gnut (I), Cotton (UI), Cotton, (Irr), Cotton (Rice Fellow),Tapioca, Potato, Onion, Turmeric , Banana, Chilly, Ginger, Horsegram.Blackgram, Sugarcane, Sesamum, Bajra (I), Jowar (I)


Paddy, Maize Urd, Gnut, Soyabean, Sugarcane, Arhar, Jowar, Bajra, Til Wheat, Gram, Peas, Mustard, Potato, Masoor


Aman Paddy, Aus Boro Paddy, Maize, Wheat, R & M, Potato


Aman Paddy, Aus Paddy, Boro Paddy, Potato


Paddy, Ragi, Wheat, Potato




Paddy I, II, III, Cotton, Sugarcane, Groundnut


Sum Insured and plan premium

  • For farmers who have availed agriculture loans and falls under compulsory coverage the minimum amount of sum insured is the amount of crop loan availed for the notified crop.
  • An optional coverage may be included in the plan, where the farmer  on optional basis may insured his crop for a higher Sum Insured i.e., up to the value of Threshold Yield or guaranteed yield which is called normal coverage.
  • Additional coverage up to 150% value of average yield is offered in the notified area, however, for additional coverage, the farmer has to pay premium at actuarial rate as notified by the State Government.
  • The value of Sum Insured in such cases is arrived at by multiplying the threshold yield/ average yield with the latest available Minimum Support Price (MSP) announced by the Govt. or the market price provided by the State Govt. in case the MSP is not announced.
  • For farmers who haven’t availed the loan facility the coverage is offered at normal rates of premium up to the value of Threshold Yield.
  • Additional coverage up to 150% of the value of Actual Yield can be obtained by payment of premium at actuarial rates.
  • In case of annual commercial and horticultural crops, only actuarial rates of premium are charged at all the slabs of sum insured.

Plan Premium

The premium for agriculture insurance plans is derived basis either a flat rates or the actuarial rate, whichever is lower shall apply

  • For Kharif crops Premium is 3.5 % of Sum insured for all Oilseed crops and Bajra and 2.5% for all others food crops including pulses
  • For Rabi crops Premium rates are 1.5% for wheat and 2% for all other food crops including pulses and oilseeds.
  • For Annual Commercial and Horticultural crops actuarial premium rates are charged.

Plan Enrollment Process

  • Any farmer, who has availed the agriculture loan from any commercial or scheduled banks, is inducted to the agriculture loan plan automatically.
  •  Any farmer who wants to voluntarily avail the plan benefit may contact Bank Branches where they have a bank account before the stipulated time frame with a proposal for insurance.
  • Farmers who have availed loans through their Kisan credit card are also eligible for the plan benefits.

Claim benefits 

  • The claim benefits are offered to only those farmer who have either have availed a crop loan for the insured crop and are covered automatically under the plan or for  non-loanee farmer, who have submitted a proposal for insurance with requisite premium.
  • The proposal/crop insurance Declaration with accurate and complete particulars should have been sent to AIC by the Bank along with requisite premium.
  • The State Govt. conducts requisite number of Crop Cutting Experiments for the insured crop in the insurance unit and submits the yield data to AIC within the prescribed date.
  • The yield data so submitted by the State Govt. shows short fall as compared to the guaranteed yield.
  • For any lower actual yield recorded in the notified areas due to widespread calamities leading to damage and loss of crops, claims are settled on area approach basis. The yield is calculated as per the crop estimation surveys conducted by the state government and is done for each crop.
  • The difference between the guaranteed yield and the current season's actual yield. Shortfall % is determined by expressing the shortfall as a proportion of guaranteed Yield. The final claim amount is derived by multiplying the sum insured with the shortfall %.
  • For the claims pertaining to non-loanee farmers, the claim amounts are paid by way of cheques or through designated bank branches such that claim amounts get credited to their accounts.

Important Terms and conditions for Claims under Agriculture Insurance plans

  • No claims would be admissible/payable in case the current season's actual yield is more than the threshold yield. Applicable amounts of claims so arrived at are routed to the farmers through the banks in case of those farmers who are covered through the banks.
  • For Claims settlement under Area approach, no intimation is required from the farmers for losses to bank/AIC. The crop losses if any or reduction in yield as compared to guarantee yield shall is calculated in Crop Estimation surveys and the shortfall in yield, if any shall be paid as claim through the Bank.
  • The claim assessment and payment would be done after receipt of the requisite yield data from the concerned agencies sharing the risk under the insurance plan.
  • The methodology of claim assessment under the plans is based on individual approach shall be intimated to all concerned upon finalizing the areas and modalities.
  • In case of "Area approach", the farmers need not intimate crop losses to bank/AIC. The crop losses if any or reduction in yield as compared to guaranteed yield shall be reflected in Crop Estimation surveys and the shortfall in yield, if any shall be paid as claim through the Bank.
  • In case of areas notified for experimentation of individual loss assessment, the farmer need to intimate the crop loss within 48 hours with the local revenue/ agriculture dept.

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