The bird flu in West Bengal has brought to surface the low penetration of poultry insurance in the eastern part of the country.

Poultry insurance in the region is less than five per cent, compared with the national average, which hovers around 9-12 per cent. A majority of the insurance buyers are big hatcheries and poultry farms.

The eastern states including the north east, ironically, account for more than 60 per cent of the country's poultry chicken. Andhra Pradesh, Maharashtra, Punjab and Haryana account for the highest number of poultry insurance.

"The number of policies issued in this segment is pretty low as the risk is very high, with majority of the loans being misused," he claimed.

According to the ministry data, roughly two crore (20 million) birds are covered by insurance policies across the country.

The problem of under-coverage is set to further aggravate as the insurance companies may re-address the policy terms due to regular outbreak of such infections.

"We are planning to redesign the whole policy structure for the poultry insurance schemes, as this flu is on the rise," said a top executive of a reputed general insurance company. In general, the policies provide indemnity against death of birds due to accident (including fire, lightning, flood, cyclone, strike, riot and civil commotion and terrorism) or diseases contracted during the insurance period.

The claims to premium ratio with respect to poultry insurance in the eastern region is about 150 per cent, which is also less than the national average of 200 per cent.

"This ratio is on the rise due to other infectious diseases as well," the executive added.

However the sum assured under the private schemes are more than the government ones.

The sum assured under the private schemes is Rs 45 for a broilers and Rs 75 for layers, compared with Rs 15 and Rs 25 respectively under government schemes.

Banks' exposure to poultry loans account for less than a per cent of their overall rural exposure as self-help groups play a vital role in credit disbursement in the rural areas.

"No SGH takes loans for poultry farming. It is only the individuals who are interested in this segment and hence the exposure is low," said Ambarisha Nanda, Chairman, Bangiya Gramin Vikash Bank. The bank has an exposure of Rs 10 crore (Rs 100 million) to poultry farming.