The Centre has initiated discussions with states to revamp the livestock insurance scheme being implemented under the National Livestock Mission for cattle population by virtually waiving off the premium of the farmers. The coverage under the existing livestock insurance component, under the Mission launched in 2014-14, remains marginal because of several factors, including higher premium paid by farmers and delays in settlements of claims, and lack of awareness among the farmers.

“Currently, the insurance scheme does not even cover 1% of the cattle population,” an official with the department of animal husbandry and dairying told FE.

Also read: India’s burgeoning InsurTech sector

At present, out of the 540 million livestock population in the country, cattle account for around 190 million.

The officials said that the lack of interest shown by the livestock farmers in the insurance scheme has led to rethinking on the part of the government to revamp it completely. The objective is to ensure that the Centre and states share a major portion of subsidy burden in line with the Pradhan Mantri Fasal Bima Yojana.

Under the livestock insurance scheme, the Centre had fixed 4.5% of the sum insured as the maximum annual premium to be charged by states with the exception of north-eastern and hilly states. The subsidy on premium is restricted to five animals per beneficiary per household.

As per the existing norms, livestock farmers belonging to below poverty line (BPL), schedule caste (SC) and schedule tribe categories in all the states with the exception of north-eastern and hilly states pay 30% of the premium while all other farmers pay half the premium. Rest of the premium is shared between the Centre and state.

Recently, the department of animal husbandry and dairying held a stakeholders’ meeting with the insurance companies and state governments for feedback on steps to be taken to expand the scheme with the livestock farmers.

The official said that there are reports of death of 0.18 million cattle population due to the lumpy skin disease (LSD) reported last year across 13 states and the insurance scheme would insulate farmers against such diseases.

Also read: 20 applications for insurance firms in pipeline: Panda

A recent report by the standing committee on agriculture, animal husbandry and food processing has stated that not even a single livestock has been insured during 2022-23 under the livestock insurance scheme. In FY22, only 0.017 million animals were insured.

The panel has recommended the department of animal husbandry to take effective steps so that the process of insurance of livestock is made easy and like the department to explore the possibility of developing an app-based livestock insurance facility for the owners.