ACTIVITIES 3

(5)Cultivators Eligible for Coverage:

All the cultivators (including share croppers and tenant cultivators) growing Apple and Mango crops in any Reference Unit Area shall be eligible for coverage. The scheme shall beCompulsory :For all Loanee applicant cultivators i.e. those who have sanctioned credit limit from a Financial Institution for as on 5^thDecember 2009 for Apple crop and 5^thDecember 2009 for Mango crop in the notified RUAs.

Voluntary:For Non Loanee cultivators i.e. those who do not have sanctioned credit limit from any Financial Institution. Financial Institution, for the purpose of the scheme includes all District Central Cooperative Bank and also the PACs affiliated to them, all Commercial Banks and all Regional Rural Banks as defined in National Agriculture Insurance Scheme (NAIS).(6)Perils Covered :

Following weather perils, which are deemed to cause “Adverse Weather Incidence”, leading to crop loss, would be covered under the scheme; Chilling requirement, Temperature fluctuations and Rainfall (deficit / excess) for Apple and Frost, Temperature fluctuations, Rainfall, wind speed for Mango crop. The specific “Adverse Weather Incidence” with its timing duration applicable is given as perterm sheet (Annexure 1 to VI).

(7)Risk Period (i.e. Insurance Period):

The crop wise risk period would be as mentioned in the term sheets.

(8)Seasonality Discipline:

The Cut off dates for covering loanee farmers, accepting the crop insurance proposals from non loanee farmers at PAC?s / Bank branches and submission of declarations by the banks to implementing agency i.e. Agriculture Insurance Company of India Ltd. would be accepted as per table given below.

No insurance coverage is allowed once these dates are over.

(9)Coverage Procedure:

(a) Insurance coverage of Loanee Applicant Cultivators shall be through the existing network of Financial Institutions (FI) at the grass-root level, using Nodal Bank system as in National Agriculture Insurance Scheme (NAIS).

(b) Insurance coverage of Non-loanee Cultivators shall be through the existing network of Financial Institutions at the grass root level; the Insurance Intermediaries and Authorized Representatives of AIC.

(c) Nodal Bank Branches shall be paid by AIC, a service charges of 5% on the actual Premium amount (excluding Service Tax) remitted by them, being in the nature of sharing the incidental management expenses incurred by them for servicing the scheme.

(10)Sum Insured:

Sum insured is equivalent to the „cost of cultivation? and is further sub divided into various covers as given in the term sheets. The sum insured for an individual cultivator shall be the product of the cultivator?s declared „area under cultivation? (in hectare) for Tomato and Potato crops and No. of trees for Apple and mango crops and the sum insured given in the term sheet per unit area / tree. An individual Cultivator?s area under cultivation? for a Notified Crop in a notified Reference Unit area shall be declared by him as follows

Loanee Applicant Cultivators:Area under cultivation? for the Notified Crop as already declared by him in the Loan Application Form for the purpose of fixing his “Maximum Credit Limit (MCL) by the Lending Financial institutions. For Apple and Mango crops, where the MCL have been sanctioned for area under the crop, the farmer shall give a self declaration to the bank indicating age group wise number of trees grown.

Non Loanee Cultivators. The cultivator shall declare the area under cultivation? for the Notified Crop in the Insurance Proposal Form.

11.Premium Rates:

Actuarial Premium Rates for these crops have been calculated by AIC using standard Premium Rating methodology and it 11.50% plus ST @ 10.30% for Apple and Mango crops.

12.Premium Sharing and Subsidy:

Of the total Premium, 50% shall be payable by the insured cultivator and the balance shall be borne by the Central and the State Govt. on 50:50 basis.

The Banks should prepare separate demand drafts for the loanee and non loanee farmers in the name of“Agriculture Insurance Company of India Ltd payable at Axis Bank A/C No. 041010200007856”payable atChandigarhand should be sent to the Agriculture Insurance Company of India Ltd, SCO 64-65, Sector 8C, Chandigarh.

(14)Compensation (Payout):

(I)AIC shall be responsible for all Payouts arising out of “Adverse Weather Incidence" strictly in terms of the Scheme terms conditions read with the elevant Premium Payout table.

(II)Pay-out shall arise only in case of Adverse Weather Incidence. Adverse Weather Incidence is equivalent to the deviation between “Trigger Weather” and “Actual Weather” Data recorded at a “Reference Weather Station” during the specified time period. Trigger Weather is a pre-defined Weather Parameter applicable to a Notified Crop in a notified Reference Unit In case of Adverse Weather Incidence (AWI), all the insured cultivators growing the Notified Crop in the Reference Unit Area shall be deemed to have suffered the same level of AWI and the same proportion of crop-loss, and become eligible for the same rate of Payouts.

(III) Pay-Out Disbursement

(a)Pay-outs would normally be made by AIC to the Nodal Banks with in 45 days of closing of insurance period subject to receipt of the necessary actual weather data.

(b)So far as the Insured is concerned, the Pay-outs procedure shall be automatic; that is to say, Payouts would be automatically computed by AIC on the basis of Actual Weather Data received, and the Payouts would be automatically credited to the insured?s Bank Account through the concerned odal Bank / Financial Institution.

(15)ROLE OF VARIOUS AGENCIES:

i) The State Level Bankers Committee (SLBC), The Lead Bank Managers, the Cooperative Banks and Agriculture Insurance Co. of India Ltd.(Implementing shall take immediate necessary action to ensure the implementation of the scheme in the State as detailed above.

ii) The Implementing Agency i.e. Agriculture Insurance Co. of India Ltd. shall ensure that claims are paid at the earliest after release of State Govt. share, Litigations, if any, for delay in payment of claims and if any other, shall be the sole responsibility of the Implementing Agency.

iii) The banks would also ensure that the claims amount is released/ disbursed to the beneficiaries within a fortnight from the date of receipt of claims amount from the Implementing Agency.

iv) The Implementing Agency shall make necessary arrangements to give wide publicity to the scheme.

v) The Convener, District Level Bankers Committee will monitor the progress of this scheme in its periodical meetings time to time.

Separate guidelines of Pilot Weather Based Crop InsuranceScheme (WBCIS) shall be provided by the Agriculture Insurance Co. of IndiaLtd. Banks / Financial Institutions are requested to strictly adhere to the saidguidelines.

Encls: - As above.

Yours faithfully,

Director of Horticulture, Himachal Pradesh, Shimla

Endst. No. 20-17/2009-Udyan-IV Dated the Shimla-2 2009

Copy along with a copy of the information referred to above is sent to the following for information and necessary action:-