Maharashtra declares drought-like conditions in 265 talukas under Rs 1,400 crore premium pool
GS3Economy · S&T · Environment · Security· MSP, procurement, PDS & food security· Prelims + Mains·
Risk mitigation in agriculture: A GS3 case study on the 'cup and cap' insurance model for climate-induced droughts.
Why in news
The Maharashtra government declared drought-like conditions in 265 talukas, triggering a claim process under a Rs 1,400 crore premium pool using a 'cup and cap' insurance model.
Background
The state implemented an 80:110 'cup and cap' model where insurers' liability is capped at Rs 1,540 crore. Claims exceeding 110% of the Rs 1,400 crore premium pool are covered by the state government.
Facts for Prelims
- FactMaharashtra declared drought-like conditions in 265 talukas.
- FactThe premium pool for the insurance scheme is Rs 1,400 crore.
- FactInsurers' liability is capped at Rs 1,540 crore under the 'cup and cap' model.
- BodyAgriculture Insurance Company of India (AIC) is involved in the claim process.
- S&TYield estimates for final claims are uploaded to the National Crop Insurance Portal.
Prelims practice question
Which organization is involved in the claim process for the drought-declared talukas in Maharashtra?
- (a)Agriculture Insurance Company of India
- (b)NABARD
- (c)Pradhan Mantri Fasal Bima Yojana
- (d)National Disaster Management Authority
Show answer
Answer: (a) Agriculture Insurance Company of India — The Agriculture Insurance Company of India (AIC) is involved in the claim process as per the note.
For Mains
Q. Evaluate the efficacy of the 'cup and cap' insurance model in mitigating agricultural risks caused by climate-induced droughts in India.
Dimensions to cover in your answer
- Fiscal risk: State liability for claims exceeding 110% of the premium pool
- Data integrity: Reliance on yield estimates uploaded to the National Crop Insurance Portal
- Risk pooling: Balancing private insurer liability with public sector safety nets
Keywords: cup and cap model · premium pool · climate-induced drought · risk mitigation · agricultural insurance
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