FIIS was introduced on a pilot basis in 15 districts of 8 States for wheat and 4 districts of 3 States for rice during Rabi 2003-4 season. Scheme covered rice and wheat crops on homogeneous approach. Insurance unit could be an administrative unit such as a village panchayat, mandal, revenue circle, block, taluka or district and the scheme was compulsory for borrowing farmers and voluntary for non-borrowing farmers. The Government subsidized premium by 75% for small/marginal farmers and 50% for other farmers. Level of indemnity was 90% for low-risk areas and 80% for high risk areas. If the actual income (current yield x current market price) is lower than guaranteed income (average yield of 7 years × level of indemnity (80% or 90%) × MSP, the insured farmer receives the compensation.