Criticising strongly the Union government for launching the National Crop Insurance Programme (NCIP), Chief Minister Jayalalithaa has stated that the “abrupt and sudden” decision of the Centre without “proper consultation” with stakeholders, especially States, came as a “rude shock” to farmers.

In her letter to Prime Minister Manmohan Singh on Sunday, the Chief Minister pointed out that her government was helping farmers in the State by extending a subsidy of 45 per cent to 50 per cent on the premium payable. Besides, it was absorbing 50 per cent of the crop loss compensation to be shared with the Union government. As a result of the efforts of the State government, the number of farmers covered under the existing agriculture insurance scheme went up from 1.01 lakh farmers in 2000-2001 to 9.76 lakh farmers in 2012-2013.

She argued that the introduction of the NCIP would increase the burden of premium on the farmers of Tamil Nadu manifold. Under the old scheme, the stipulated premium level was 2 per cent to 3.5 per cent of the sum insured, depending on the season and crop. Due to the State government’s assistance, the farmers would have to pay only one per cent to 1.75% of the sum insured. Now, this would go up to 3.75 per cent to 4.8 per cent. “With such high premia, I really doubt whether farmers will come forward to insure their crops and mitigate their risks,” she said.

Ms. Jayalalithaa suggested that the additional premium over and above 2 per cent of the sum insured under the NCIP be borne equally by the State Government and the Government of India without passing on the burden to the farmers. Seeking Dr. Singh's personal intervention in the matter, she called for a “speedy decision” on her suggestion.

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