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The National Agricultural Insurance Scheme (NAIS) or Rashtriya Krishi Bima Yojana (RKBY) was devised by Central Government for the welfare of agriculturists. The object of the Scheme is, to provide insurance coverage and financial support to the farmers in the event of failure of any notified crop as a result of natural calamities/pests/disease and entitling the farmers to stabilize farm income, particularly in disaster years. Under the Scheme, the insurance will cover yield losses due to non-preventable risk. The Scheme is comprehensive with regard to the area coverage, farmers to be covered, the risk, their inclusion, the sum insured, premium rates, the area approached, the nature of coverage and indemnity, procedure for approval and settlement of claims and operational modalities etc., Karnataka State Government

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actual yield per hectare of the insured crop for the defined area in the insured season falls short of the specific threshold yield, all the insured farmers growing that crop in the defined area are deemed to have suffered the short-fall in the yield. The Scheme seeks to provide coverage such contingency.

4. Indemnity shall be calculated from the following formula:

Shortfall in yield/threshold yield X sum insured for the former.

12. Sri.N.P.Vivek Mehta, learned counsel appearing for the appellant assailing the impugned order passed by the learned Single

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Judge as well as the Permanent Lok-adalath contended that the Implementing Agency has to work under the Scheme. Under the Scheme, the compensation is payable to the farmers, who had insured the crop grown by them and when the insured crop falls short of the threshold yield. What is 'threshold yield' and what is 'Actual Yield' are defined under the Scheme. How indemnity is to be calculated is also provided in the Scheme by setting forth a formula. The shortfall in the yield is arrived at by taking a note of 'threshold yield' and 'actual yield'. If the actual yield is less than the threshold yield, then the farmers will be paid the sum insured as multiplied by the threshold yield. In the instant case, the threshold yield as per the information furnished to the Implementing Agency by the State Government

13. As set out above, the threshold yield or guaranteed yield for a crop in an Insurance Unit shall be moving average based on past three years average yield in case of rice and wheat and five years in case of other crops as multiplied by level and indemnity. Actual yield per hectare of the insured crop for the defined area in the insured season, is also calculated by the Director of Economics and Statistics. The

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shortfall in the yield is arrived at by taking into consideration the threshold yield and taking out of the threshold yield, the actual yield with data, if any, which is divided by threshold yield and multiplied by the sum insured for the farmers to indemnify the farmers, who has suffered shortfall in the yield.