Action soon to introduce crop insurance scheme: Jayant Sinha

Action would soon be taken to introduce a national crop insurance scheme, government said today observing that the agriculture sector was passing through a crisis due to poor rains.

Responding to a series of supplementaries in the Lok Sabha, Minister of State for Finance Jayant Sinha also stressed the need to invest more as part of a long term plan to improve the health of the sector.

He said there was a need to improve the fertiliser subsidy system, invest more in irrigation facilities and use technology like soil health cards to improve the agriculture sector.

Sinha said discussion was on to introduce national crop insurance and "there will be action soon" on the issue.

Oberving that the agriculture sector was passing through a crisis, he said the government would not remain satisfied with short-term measures alone and would put in more efforts on long-term measures which required more investment to improve infrastructure.

The Minister said lack of rains consecutively over the past few years has led to the crisis.

He said while earlier short term measures like loan restructuring used to kick in when 50 per cent of crop failure was reported due to drought or floods, now the benchmark for crop failure to initiate such measures has been fixed at 33 per cent, to help more number of farmers.

In a written reply to a question on relief measures for farmers like interest-free loans to those affected by drought, Finance Minister Arun Jaitley said with a view to ensure availability of agriculture credit at affordable cost, the government was implementing interest subvention scheme to make available short-term crop loans up to Rs 3 lakh for a period of one year at an interest rate of 7 per cent per annum.

In case of timely repayment, the interest rate gets reduced to four per cent, he added.