Critically analyse the role of premium subsidies and cost-sharing arrangements in expanding risk cover for small and marginal livestock farmers.

For a small farmer, the death of one milch animal can wipe out both capital and daily income. Livestock insurance, now a part of the National Livestock Mission (NLM), tries to spread this risk by subsidising the premium heavily [3]. Subsidies and Centre–State cost-sharing have made cover cheaper and wider. However, how the scheme is designed and delivered still limits how far it reaches the poorest.

Role in expanding risk cover

• Affordability: The farmer's share of the premium was cut to a uniform 15%, down from slabs of 20–50% [3]. This lowers the cost barrier for marginal households.
• Wider eligibility: The insurable limit rose from 5 to 10 cattle units per household (1 cattle unit = 10 small animals). Covered animals include goat, sheep, pig, yak and mithun, which reaches landless, pastoral and tribal families [2].
• Equity-sensitive federal sharing: The remaining 85% of the premium is shared 60:40 between Centre and State, 90:10 for Himalayan and North-Eastern States, and paid 100% by the Centre in UTs [2].
• Visible uptake: 55.86 lakh animals were insured over five years. 21.01 lakh of these were insured in a single year, which suggests coverage has sped up [4].

Limitations

• Dependence on States: The 15% share only reaches the farmer if the State budgets its 40%. Fiscally weak States can stall cover for their own farmers [2].
• Caps hurt herders: Large sheep and goat flocks exceed the household cap. Pigs and rabbits stay capped at 5 units, which hurts tribal and North-Eastern households [2].
• Enrolment is not protection: Public data reports animals insured and ₹135.32 crore released, but not claims settled or how long payment took [4].
• Verification bottleneck: RFID runs alongside older ear tags rather than replacing them, so claims can still be disputed [3]. A digital-first portal, even in 13 languages, may still leave out farmers with poor connectivity [1].

Way forward

• The new portal should publish State-wise claim-settlement data [1].
• Insurance records should be linked to the Bharat Pashudhan animal database to stop duplicate claims [5].
• Veterinary staff should be able to file claims on the farmer's behalf, especially in 90:10 States.

Premium subsidies and graded cost-sharing have clearly widened access. Whether they actually protect farmers now depends on States paying their share, caps suited to herders, and fast, verifiable claims. Getting these right would turn a subsidy into real resilience, in line with SDG 1.5, and would make cooperative federalism work for the poorest livestock keepers.