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Revamping Livestock Insurance


Recently, a Parliamentary Standing Committee (PSC) voiced concerns regarding livestock’s lack of insurance coverage in 2022–2023. The Prime Minister’s Fasal Bima Yojana is the inspiration for the Center’s proposed comprehensive livestock insurance programme.


GS Paper-2: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Mains Question

Describe the proposed comprehensive livestock insurance plan and the steps the centre has taken to boost enrollment. Draw attention to the issues brought up by the Parliamentary Standing Committee on Agriculture and Animal Husbandry and offer solutions. (250 Words)

Scheme for Livestock Insurance

  • Class: Centrally sponsored programme.
  • Launch: It was implemented as a pilot project in 100 chosen districts during the 10th Five Year Plan’s 2005–2006, 2006–2007, and 2007–2008 periods.
    • The programme is being regularly implemented in 100 chosen districts across the nation as of 2008-2009.
  • Goal: o To safeguard farmers and cattle farmers against any potential loss of their animals due to death and to show the value of livestock insurance.
  • Implementation: The State Livestock Development Boards of each state are responsible for carrying out the scheme, with the exception of Goa.
  • Coverage: o Under the plan, crossbred, high-yielding cattle and buffaloes are insured for the highest amount possible based on their current market value.
    • The programme offers coverage for a maximum of two animals per beneficiary for a period of three years.
    • A 50% subsidy is applied to the insurance premium.
    • The Central Government is paying the full cost of the subsidy.

Current Status of Livestock Insurance Scheme:

  • The current livestock insurance scheme, which is operational in 100 districts of the country, is managed by the respective State Livestock Development Boards.
  • However, less than 1% of the country’s cattle population is insured, and the average yearly premium is 4.5% of the insured amount.

Key problems with livestock insurance programmes include:

  • High policy premium rates, which deter many farmers from signing up for livestock insurance programmes.
    • Many farmers, especially those from economically depressed sections, cannot afford the average annual premium, which is 4.5% of the insured amount.
  • The necessity of comprehensive crop and livestock insurance: Livestock insurance is essential for farmers and the expansion of the agricultural industry.
    • Two lakh cattle died as a result of the recent Lumpy Skin Disease pandemic, prompting farmers to ask the government for compensation.
    • To lessen the effects of such pandemics, a comprehensive livestock and crop insurance programme is required, covering all facets of animal husbandry and agriculture.
  • Conflicting governance structures: Farmers are frequently involved in conflicts between state government representatives and insurance companies. This delays the resolution of claims and worsens the situation for farmers.
    • Because each State Livestock Development Board oversees the current programme, there are administrative delays and inconsistencies in the program’s execution.

The Parliamentary Standing Committee made the following recommendations:

  • It advised the Ministry to take decisive action to simplify the livestock insurance procedure.
  • The Committee recommended looking into the possibility of creating a Livestock Insurance facility for owners of livestock through an app.
  • It also raised concerns about the lack of insurance in 2022–2023 and suggested that the Ministry take concrete steps to simplify the insurance of livestock for beneficiaries.

The Proposed Scheme for Livestock Insurance

  • The Ministry intends to replace the current Livestock Insurance Scheme with a comprehensive livestock insurance programme.
  • Recently, the Ministry met with various insurance providers and other interested parties to discuss the issue. The objective is to lower the premium so that more farmers sign up for the programme.
  • Due to the high policy premium rates and general economic conditions of farmers, the Centre is considering eliminating the premium for cattle rearers from Scheduled Caste (SC)-Scheduled Tribe (ST) communities.
  • The Ministry prefers direct transfer of benefits to farmers’ accounts, while the Centre works to keep premiums low and ensure that livestock are covered to the greatest extent possible. Benefits will be transferred directly, improving transparency and simplifying the process for farmers.


  • The proposed comprehensive livestock insurance scheme aims to increase the coverage of livestock and lower the premium rate.
  • Livestock insurance is essential for the financial security of farmers who are engaged in livestock farming.The need for a strong insurance programme to safeguard farmers’ interests is highlighted by the recommendations of the Parliamentary Standing Committee and demands from farmers’ organisations for comprehensive livestock and crop insurance.

February 2024