Cattle Insurance | Animal Husbandry & Veterinary Science Optional for UPSC PDF Download

Cattle Insurance in India Background

• More than thirty years ago, India lacked organized insurance facilities for cattle assets due to insufficient statistical data for setting premium rates.
• In 1962, a Cooperative Mutual Company in Maharashtra and Gujarat initiated cattle insurance despite these challenges.

Rationale for Insurance:

• In India, cattle primarily served as draft animals for cultivation, with dairy farming in its early stages, mainly in urban areas.
• For many farmers, cattle were their sole working capital, and losing a bullock could lead to financial struggles or reliance on moneylenders.
• Natural disasters like floods and cyclones emphasized the need for insurance at a national level. 

Challenges faced by Cattle Insurance Societies:

• Lack of effective promotion to combat fatalism among cattle owners.
• Reluctance of cattle owners to pay necessary premiums based on mortality rates.
• Doubts about societies' ability to cover heavy losses from epidemics.

Inadequacy of Veterinary Services:

• Professional insurers hesitated to engage in cattle insurance due to insufficient veterinary services in the country.
• Efficient veterinary services are crucial for ensuring the health and well-being of insured cattle.

Importance of Veterinary Services:

• Veterinary services play a vital role in maintaining the health of livestock.
• Proper healthcare services can prevent disease outbreaks and ensure the well-being of cattle.

Need for Collaboration:

• Collaboration between insurers and veterinary services is essential for the success of cattle insurance schemes.
• Improved coordination can enhance the overall effectiveness of cattle insurance programs.

Livestock Management and Insurance Overview

Primitive Livestock Conditions: 

• The housing and care of cattle in India are still underdeveloped and unsatisfactory, leading to high mortality rates and challenges for insurers to offer affordable rates. 
• This situation pushes facilities to remain limited to organized dairies and farms.

Cooperative Efforts in Livestock Management: 

• Cooperative dairies and farms have shown that collective efforts can achieve what individuals may struggle to accomplish alone. 
• By pooling resources under cooperative structures with efficient management, wastage is reduced, and access to veterinary services in remote areas is ensured.

Livestock Contribution to the Economy: 

• Despite the underdeveloped state, livestock farming significantly contributes to India's economy. 
• The 2004 livestock census reported a substantial cattle and buffalo population, with dairying serving as a vital income source for many rural households.

Livestock Role in Agriculture: 

• Livestock primarily serve as a source of draught power in agriculture. 
• Cattle and buffaloes are essential investments for farmers, providing milk, fuel, fertilizer, and support for agricultural activities.

- Dairy Development Initiatives: 

• The establishment of milk plants, pilot milk schemes, and milk product factories has shown significant progress. 
• The National Dairy Development Board, formed in 1963, has played a crucial role in promoting dairy development in India.

Government Schemes and Initiatives

Integrated Rural Development Programme (IRDP): 

• This scheme aims to uplift rural areas by supporting small farmers, marginal farmers, and agricultural laborers to improve their livelihoods. 
• Assistance is provided to families below specific income thresholds to enable self-employment ventures.

Nationalization of the Insurance Industry: 

• In 1972, the insurance industry was nationalized, leading to the amalgamation of companies under the General Insurance Corporation of India. 
• The goal was to extend insurance benefits to the weaker sections of society and support poverty alleviation efforts.

Cattle Insurance Scheme Details

Coverage and Benefits: 

• The Cattle Insurance Scheme covers cattle deaths due to accidents or diseases. 
• Various categories of cattle, including milch cows, bullocks, and buffaloes, are eligible for coverage under the scheme.

Premium Rates and Discounts: 

• Farmers under specific government programs receive subsidized premium rates. 
• Long-term covers and premium discounts are available for different categories of cattle, including elite animals registered under special schemes.

Claim Settlement and Risk Coverage

 Claim Settlement Process: 

• The scheme determines the sum insured based on the purchase committee's valuation for government-sponsored animals or a qualified veterinary doctor's assessment for private farmers. 
• Market value at the time of claim is considered for settlement.

Risk Coverage: 

• Insurance coverage starts from the time of animal purchase and includes transit by foot, road, or rail. 
• Additional risks like permanent total disability can be covered with extra premiums.

Overview of Cattle Insurance

• Coverage: Cattle insurance provides protection for various categories of livestock, including milch cows, milch buffaloes, bullocks/male buffaloes, stud bulls, and workers.
• Valuation: The valuation of calves varies based on factors such as age and category, with different values assigned to buffalo calves and crossbred female calves at different ages.
• Insurance Premiums: Premium schemes are offered for different durations, with varying premium rates based on the duration of coverage and the type of cattle insured.
• Claims Procedure: The claims process involves specific steps to be followed by farmers or insured parties in the event of the death of an animal, including notifying the relevant authorities and submitting necessary documentation for claim settlement.
• Population: Insurance companies have expanded their presence in rural areas to cater to the demand for cattle insurance, offering services in regional languages and employing veterinary officers to assist farmers with animal husbandry practices.

Premium Schemes and Coverage:

• Duration-Based Premiums: Premium rates vary depending on the duration of coverage, with options ranging from short-term to long-term insurance plans.
• Category Coverage: Different categories of cattle, such as milch cows, buffaloes, and bulls, are covered under specific insurance schemes with predefined values for valuation and coverage.

Claims Processing and Settlement:

• Efficient Claim Settlement: Insurance companies have streamlined the claims settlement process to ensure timely processing of claims, including providing advance claim forms to banks and designated authorities.
• Documentation Requirements: Farmers must follow specific procedures, including notifying the authorities within a specified timeframe and submitting the necessary documents to facilitate claim settlement.

Role of Insurance Companies:

• Rural Outreach: Insurance companies have established branches in rural areas to cater to the demand for cattle insurance, offering services in regional languages and educating farmers about the benefits of insurance coverage.
• Expert Guidance: Veterinary officers are employed to provide guidance on animal husbandry practices and offer necessary treatment to insured animals, ensuring their health and productivity.