Livestock is the insurance of the rural poor, yet livestock itself remains largely uninsured. Examine the constraints on livestock insurance penetration in India and evaluate recent reforms.

For small, landless and pastoral households, animals work as savings that can be sold in hard times. Yet the Livestock Insurance Scheme under the National Livestock Mission (NLM) insured only about 55.86 lakh animals over five years [1]. Cost, scheme design, animal verification and delivery gaps keep cover low. Recent reforms fix some of these but not all.

Constraints on penetration

• Affordability: farmers earlier paid 20–50% of the premium, which kept poor households out [2].
• Coverage caps: the subsidy was limited to 5 cattle units per household [2]. Pigs and rabbits are still capped at 5, which hurts tribal and North-Eastern pig-rearers [3].
• Proving the claim: a claim needs proof that the dead animal is the insured one. This rests on ear tags and a veterinary check, so a lost tag means a disputed claim.
• Centre–State dependence: States must fund 40% of the subsidised share (10% in Himalayan/NE States) [3]. If a State does not budget for it, its farmers lose the subsidy.
• Access: paper-based, agent-driven processes, language barriers and low digital literacy in remote areas.
• Opaque outcomes: public data counts animals insured and funds released, not claims paid or how long settlement took [1].

Evaluation of recent reforms

Strengths

• Uniform 15% farmer premium. The remaining 85% is shared 60:40 by Centre and States, 90:10 for Himalayan/NE States, and paid fully by the Centre in UTs [2][3].
• The cap was raised to 10 cattle units (1 unit = 10 small animals). Cover includes yak, mithun and pack animals [3].
• RFID tagging was approved to curb duplicate or false claims [2].
• The Livestock Insurance Portal (September 2026) handles policy issuance, claims, monitoring and reporting in 13 languages [4].
• Uptake has risen: 21.01 lakh animals were insured in a single year, nearly 40% of the five-year total [1].

Limitations

• RFID is used alongside the old tags, not in place of them, so two systems will run in parallel [2].
• The portal digitises paperwork but not the check on the ground. Insurance records are not yet linked to DAHD's Bharat Pashudhan Portal of animal records [5].
• The dependence on State funding and the digital divide remain, especially in 90:10 regions.

Overall, the reforms tackle affordability and transparency well but only partly solve verification and last-mile access. DAHD should publish State-wise claim-settlement data, link insurance to Bharat Pashudhan records, and let veterinary staff file claims for farmers. That would make livestock insurance a real safety net, in line with SDG 1.5 on building the resilience of the poor.