Is RBI out of sync with crop loan insurance?

CHENNAI: Is insurance cover for crop loans mandatory? Depends on whom you are talking to. While the Deputy Governor of Reserve Bank of India, K C Chakrabarty, claims that the National Agriculture Insurance Scheme (NAIS) is “not compulsory for all loanee farmers” and that “no person could be forced to take up insurance cover,” the operational modalities of NAIS, put up on the Department of Agriculture and Cooperation website, provides a completely different picture.Saying that “one must read the guidelines of the schemes properly,” Chakrabarty argues: “Just like a person cannot be forced to take up life insurance, a farmer cannot be forced to take up insurance cover.” He was answering a question on the poor penetration of NAIS even among notified crops in Tamil Nadu, at a press conference on Sunday at a sensitisation meet of bankers and farmers here.However, in a document titled ‘National Agriculture Insurance Scheme (NAIS) - Scheme and Modalities’ available on the website of the department, under the head ‘Farmers to be Covered’, it is clearly stated that “all farmers growing notified crops and availing Seasonal Agriculture Operations loan from Financial Institutions, i.e. Loanee Farmers” should be covered under the scheme “on a compulsory basis”.Senior agriculture officials point out that hundreds of government circulars since the scheme took effect in 1999-2000 have reiterated the modalities of NAIS and they have always worked according to it.