Performance of Cattle Insurance in Select Districts of Karnataka

The study was conducted in Kolar, Shivamogga and Dharwad districts representing Southern, Malnad and Northern regions of the Karnataka. The data was collected from secondary sources for the selected districts and State. The study employed Compound Annual Growth Rate (CGAR). The results showed that number of animals insured under National Livestock Insurance (NLM) scheme in Karnataka between periods (2006-18) grew from 9487 to 236332 with CAGR of 28.52 per cent. The claim to premium percentage varied from 20 to 81 per cent. Number of animals insured was found to be higher under Cattle Group Insurance scheme (26278 to 37477) than NLM scheme (970 to 7360) in Kolar district between periods (2015-18). The lowest claim to premium percentage was observed in Dharwad under NLM scheme ranging between 13.32 to 25.46 per cent in the period of 2015-16 to 2017-18.

The livestock insurance scheme had its genesis in Germany, since then, the livestock insurance schemes have been evolving and presently several types of schemes have come into existence. Among developing countries, livestock insurance schemes have developed with a differential success across countries. Currently, several types of national livestock insurance systems exist in most developed countries but are still evolving in the developing countries. Therefore, in India too, the livestock insurance was conceived as an effective instrument to protect this vital farm asset, long ago, but organized Cattle Insurance Scheme was initiated through the Small Farmers Development Agency (SFDA) in 1971. But, the scheme got a real impetus only when nationalized banks started financing for the cattle and agreed to collect premium from beneficiaries under Integrated Rural Development Programme (IRDP). But, in spite of concerted efforts by the Central and State governments, it has not picked up at the desired pace. The coverage is very restrictive. A serious debate has been raging on to strengthen the agriculture and livestock insurance in the country.
Government of India introduced the livestock insurance scheme on a pilot basis during the years 2005-06 and 2006-07 of the 10 th Five Year Plan  in 100 selected districts through Department of Animal Husbandry, Dairying and Fisheries. The high yielding cattle and buffaloes were insured at maximum of their current market price. The premium prevailed at the rate of 4 per cent of the value of animal chosen and varied over the period, schemes, term to insured, etc. In the case of non-scheme animals, the premium rate was 4 per cent in co-operative dairies, 5 per cent for private farmers or bank finance and for scheme animals was 2.25 per cent for one year term. The rate of premium was not to exceed 4.5 per cent for annual policies and 12 per cent for three-year policies. The premium of the insurance was subsidized to the tune of 50 and 70 per cent to above poverty line (APL) and below poverty line (BPL) / Scheduled Caste (SC)/ Scheduled Tribes (ST) dairy farmers respectively. Of the 50 per cent subsidy to APL dairy farmers, 25 per cent was from Government of India (GOI) and 25 per cent from Government of Karnataka (GOK). Whereas, the share of subsidies for BPL/SC/ST dairy farmers was 40 per cent and 30 per cent from GOI and GOK respectively. The insurance was restricted to two animals per beneficiary under the scheme and has been given for one-time insurance to animal up to three years. The twin objectives of National Livestock Insurance scheme were to serve as protection mechanism to the farmers and cattle rearers against any eventual loss of their animals due to death and to demonstrate the benefit of the insurance of livestock to the people and popularize it with the ultimate goal of attaining qualitative improvement in livestock and their products. Similarly, Cattle Group Insurance scheme was steered by District Cooperative Milk Unions (DCMU) in selected districts of Karnataka which executed under the assistance of Karnataka Milk Federation (KMF) and reached through Primary Dairy Cooperative Societies (PDCS) to dairy farmers by providing premium subsidy to the extent of 50 per cent (25% DCMU + 25% KMF) and remaining 50 per cent premium to be borne by the beneficiary farmers. There was no limit on the number of animals to be insured under this scheme. The premium rate was around 1.5 per cent of the value of the animal. Taking into account the importance of livestock to poor farmers, the insurance is available at different subsidized premium rate to different categories of farmers under Central and State sponsored scheme.
The study was about to distinguish the cattle insurance performance in the study area. In this paper mainly discussed National Livestock Insurance Scheme (NLM) and Cattle Group Insurance Scheme (CGIS) were the main livestock insurance schemes which have been present in the study area and enlightened above.

MATERIALS AND METHODS
Karnataka state is divided into three distinct regions namely Northern plain region, Malnad & coastal region and Southern plain region based on topography, cropping pattern and animal husbandry. The North Karnataka is dominated by buffalo, South Karnataka by crossbred cattle and Malnad & coastal region by indigenous cattle. Kolar, Shivamogga and Dharwad districts were selected from the Southern, Malnad and Northern regions of the state respectively. Kolar district is having relatively maximum proportion of crossbred cattle population (1.73 lakhs) as compared to Shivamogga and Dharwad. Kolar district ranks first in terms of livestock insurance. No empirical research was conducted in the past in these districts. These districts also represent the progressive dairy farming regions of Karnataka, besides the good coverage of cattle insurance scheme.
The secondary data regarding to total geographical area of the selected district, land use pattern, cropping pattern, bovine population, milk production, various inputs & outputs of milk production, cattle insurance access, number of animals insured, premium rate, premium amount, number of claims made, number of claims settled and claim amount paid to the beneficiaries in the study area was collected from various published and unpublished sources from various departments like Karnataka State Department of Agriculture, Department of Animal Husbandry and Veterinary Services, Karnataka Milk Federation, District Milk Unions and Primary Dairy Cooperative Societies (PDCs) and District Statistical Office. The study employed compound annual growth rate for analysing growth rates.

Compound annual growth rate
Compound annual growth rates were calculated using exponential form /semi-log model for number of animals insured, premium amount collected, total number of claims lodged, total number of claims settled, total claim amount paid under National Livestock Insurance Scheme and Cattle Group Insurance for selected districts of Karnataka state. The exponential form of the model is as below: For the purpose of estimation, above equation was transformed into log-linear form and parameters were estimated using Ordinary Least Square (OLS) technique.
The compound growth rate (g) in percentage was then computed from the following relationship: where, Y = Explained variable or dependent variable β 1 = Intercept or constant term β 2 = Regression coefficient t = Explanatory or independent variable (years which taken the value 1, 2, 3, n)

RESULTS AND DISCUSSION
The number of animals insured, claims lodged, claims settled have been analysed in terms of growth rate and worked out the claims lodged to animal insured, claims settled to claim lodge percentages (Physical progress). Further, the growth rate in premium rate, premium collected, claim settled and claim to premium percentage (Financial progress) were worked for the schemes (

Trends in districts covered and premium rate under National Livestock Insurance Scheme in Karnataka
The districts covered and premium rate under National Livestock Insurance scheme in Karnataka is presented in Table 1. Only four district were covered at the time of implementation period (2006)(2007)  This might be a major reason for the progress of cattle insurance in Kolar as compared to Shivamogga and Dharwad districts, besides more crossbred cattle population in Kolar. While, present (2017-18), premium rate of cattle insurance is 2 per cent of market value of the animal which has been reduced from 4.5 per cent during the implementation period 2006-07.

Animals insured and claim status under National Livestock Insurance Scheme in Karnataka
The number of animals insured and claim status of NLM scheme in the state during the period 2006-07 to 2017-18 is presented in Table 2 (2015).

Premium collected and claim paid under National Livestock Insurance Scheme in Karnataka
It can be seen from the

Animals insured and claim status under different schemes in select districts of Karnataka
The number of animals insured and claim status under different schemes in Kolar district is presented in  (Table 5).  The cattle insurance scheme has not been implemented in Dharwad as in the case of Kolar and Shivamogga because of dominance of buffaloes and indigenous cattle as compared to crossbred cattle. Farmers were not interested to insure indigenous cattle and buffaloes. The number of animal insured varied from 3000 to 5500 in between the period 2015-16 to 2017-18 under NLM scheme. The claim lodged and claim settled was ranged 11 to 32 and 10 to 28, in respective periods. The claim lodged to animal insured percentage varied from 0.37 to 0.58 per cent was low as compared to Kolar and Shivamogga districts due to low incidence and less susceptible for diseases from the wide distribution of buffaloes and indigenous cattle (Table 6).  (Table 7). Decrease in the premium amount collected per animal is due to reduction in premium rate from 2.5 per cent to 2 per cent.
In the case of Cattle Group Insurance, the total premium collected increased from ` 186.77 lakh to ` 296.06 lakh and is due to increase in the number of animals insured from 26378 to 37477 between 2015-16 to 2017-18. Premium collected per animal was lower in CGI scheme than in NLM scheme this is due to lower premium rate under CGI scheme. The premium rate decreased to 1.58 per cent in 2017-18 from 1.69 per cent in 2015-16. Claim to premium ratio was high in CGI scheme than in NLM scheme. The average claim to premium ratio was 78.63 per cent and 59.89 per cent in CGI and NLM scheme, respectively. The difference in claim to premium ratio is because of easy accessibility to CGI scheme as this is implemented by District Diary Milk union. Claim paid per animal was also more under CGI scheme compared to NLM scheme. Claim paid per animal was ` 47,891 and ` 49998 under NLM and CGI scheme respectively for the year 2017-18 (Table 7).
Premium collected and claim paid under NLM scheme and CGI scheme in Shivamogga is presented in Table 8. The results revealed that, despite more number of animals insured in CGI scheme (8550 in 2017-18) than NLM scheme (8440) in 2017-18. The premium collected was high under NLM scheme (` 68.7 lakh in 2017-18) than in CGI scheme (` 56.59 lakh) this is because of higher premium rate charged under NLM scheme (2% in NLM and 1.58% in CGI during 2017-18). It is interesting to note that, the premium collected per animal was low and claim paid per animal high under CGI scheme compared to NLM In Dharwad the premium collected increased from ` 25.82 lakhs to ` 42.77 lakhs and is because of the number of animals insured during the period 2015-16 to 2017-18. (Table 9). The total claim paid also increased from ` 3.44 lakhs to ` 10.89 lakhs over the period. Premium collected per animal decreased from ` 860.53 to ` 777.56 and is attributed to decrease in the premium rate from 2.5 to 2.0 per cent of animal value. The claim paid per animal increased from ` 34421 (2015-16) to ` 38878 per animal . The claim to premium percentage varied from 13.32 to 25.46 per cent between the period 2015-16 and 2017-18.

CONCLUSION
The number of animals insured was found to be higher under Cattle Group Insurance scheme than in NLM scheme in Kolar district. The CGI scheme was easily accessible to the farmers which involved lower transaction cost, there is no restriction on number of animals to be insured and low premium rate and high claim paid per animal and high claim to premium ratio to NLM scheme. The lowest claim to premium percentage was observed in Dharwad under NLM scheme because of dominance of buffaloes and indigenous cattle as compared to crossbred cattle. Farmers were not interested to insure indigenous cattle and buffaloes. The coverage of cattle insurance is still very low, so there is a need put effort by the insurance implementing agencies to increase the coverage.