Flat rates of premium for food and oilseed crops and actuarial rates of premium for annual commercial or horticulture crops are charged. Flat rates of premium are fixed keeping in view the capacity to pay the premium.
For working out actuarial rates, pure risk premium at the first stage is estimated by considering variation in past yield of the insured crops. The estimated pure premium rates are then loaded by some parameters like inflationary trends so as to arrive at applicable actuarial rates of premium.
The scheme operates on an area approach, in other words if the current seasons yield is less than the threshold yield of the notified unit area for the insured crop, all farmers in the notified crop area become eligible for compensation.
Half the farmer-population in Rajasthan and 30% in Madhya Pradesh have been covered under the scheme, said Kanti Lal Bhuria. The government has also disbursed Rs 660 crore towards claims to 3.66 million farmers during the period.