VAE 511: Livestock Entrepreneurship (1+0)

INTRODUCTION- LIVESTOCK INSURANCE

• Livestock farming involves numerous risks – natural, social and human.
• The uncertainty of livestock yields as a result of death of animals is one of the basic risks that every farmer has to face.
• Risks are simply future issues that can be avoided or mitigated and risk is always a probability issue whereas uncertainty is the lack of complete certainty, that is, the existence of more than one possibility. The true outcome/state/result/value is not known.
• The individual farmer with limited resources is seldom able to face such risks, and this result in disastrous losses.
• Livestock insurance, exists in many countries as an institutional response to nature induced risk.
• The importance of risk mitigation cannot be overstated as far as Indian farmers are concerned.
  • In India, agriculture and allied activities such as animal husbandry continues to be the main source of livelihood for millions of households.
  • A large majority of producers are small farmers.
• Livestock for their feed depends on the fodder production which depends on the monsoon which has been uneven.
• Apart from this, there is widespread incidence of diseases, drought, floods and fluctuations in market prices of livestock products which makes it a risky venture.
  • A recent example is the incidence of Bird flu which resulted in a huge loss to the poultry industry.
• In this juncture, livestock insurance plays a vital role for maintaining the sustainability of the production.
• A concrete step for introducing crop insurance at the national level was taken only in October 1965 and livestock insurance was started after that in late 70’s.

Present status of Livestock Insurance

• For promotion of the livestock sector, it has been felt that along with providing more effective disease control and improvement of genetic quality of animals, a mechanism of assured protection to the farmers and cattle rearers needs to be devised against eventual losses of such animals.
• In this direction, the Government has approved a new centrally sponsored scheme on Livestock Insurance.A Centrally sponsored scheme of livestock insurance is being implemented in all the States with
  twin objectives: providing protection mechanism to the farmers and cattle rearers against any eventual loss of their animals due to death; and demonstrating the benefits of insuring livestock to the people. The
  scheme, which was introduced in 100 selected districts on pilot basis during 2005-06, has now been extended to 300 selected districts covering all states. The scheme benefits farmers and cattle rearers
  having milch cattle and buffaloes. In 2010-11, Rs. 20.12 crore has been released up to December 2010 and 20.63 lakh animals were insured from 2006-07 to 2009-10.