Madhya Pradesh floats home-grown crop insurance scheme

The scheme is unique in that it covers loss in productivity and loss due to price crash

In order to boost the age-old crop insurance scheme and ensure a minimum level of income for farmers during a crisis, the Madhya Pradesh government today proposed a home-grown crop insurance scheme.

If implemented, Madhya Pradesh will become first state to have its own crop insurance scheme. State chief minister Shivraj Singh Chouhan today hosted a two-day marathon meeting to seek support from all stakeholders, experts and central government authorities to make the scheme a reality.

"At present, existing crop insurance schemes do not provide any help to farmers in case of natural disaster or loss in productivity due to adverse market conditions. There is need to alter them," Chouhan said.

The crop insurance scheme has two main peculiarities; cover against loss in productivity and loss due to price crash. Largely the scheme would hinge upon central and state government support, and the farmer will have to chip in according to his farm income.

The scheme also proposes to give a certain amount as instate relief to farmers in advance, in cases of crop loss due to catastrophic reasons. The advance would be adjusted later when the farmers are compensated from their insurance claims.

"The average premium to be paid by farmers would depend upon their average farm income, which would be calculated by taking the reference prices of minimum support price and farm gate price," Rajesh Rajora, principal secretary state farmers welfare and agriculture development department said. "If the proposed insurance scheme takes shape, farmers will also be able to get cover for post-harvest loss, as their farms would be taken as unit instead of present system of considering patwarihalka as a unit."

There is a plan to empanel private insurance companies if they want to participate in the new crop insurance scheme. "The central and state government would ensure a guaranteed premium for every farmer," Rajora said.

The insurance scheme would cover foodgrains, oilseeds, cash crops like cotton and even horticultural produce. Another important factor of the new scheme is that it ensures insurance cover up to 80% of crop losses.

However there are constraints as well. The state government needs at least 3,000 automated weather station, remote sensing equipment for assessing crop losses, and nearly 25,000 automated rain gauges. "We have sought the support of institutions like ISRO and NRSC (to have these in place," Rajora said.

Speaking on the occasion Vinay Shastrabuddhe, Director-General of Rambhau Mhalgi Prabodhini, a research and training academy for elected representatives and social activists, said the crop insurance scheme needed to be personalised, prioritised, professionalised and to a certain extent privatised.

Ashok Vishandass, Chairman, Commission for Agriculture Value and Prices, said if implemented in a proper way, the proposed scheme would require approximately Rs 100 per hectare premium from farmers.