Premium cut by 50 bps at last minute

While the new crop insurance scheme fixed a uniform premium of two per cent (of the sum insured) for all kharif crops and 1.5 per cent for all rabi crops, officials say consensus on this did not come in one go.

The agriculture ministry had earlier proposed a premium of 2.5 per cent for all kharif crops and two per cent for rabi crops. For horticulture crops, the premium was always fixed at five per cent. However, top officials in the Prime Minister's Office (PMO) intervened at the last moment to lower premium further by 50 basis points (bps). This meant greater financial implication, but the matter was settled in the interest of farmers. Till last week, the farm ministry's proposal was thought to be final.

The name of the scheme was earlier planned as Bhartiya Krishi Bima Yojana, which was altered into Pradhan Mantri Fasal Bima Yojana (Prime Minister's Crop Insurance Scheme) to ensure universal acceptance from states.

Some officials said the planned press briefing was postponed for a few hours, as the PMO wanted all the aspects of the scheme to be taken care of before the formal launch.