Govt unveils crop insurance scheme; entails Rs 8.8K cr outgo

In order to provide relief to drought-hit farmers, the government today announced a new Rs 8,800 crore crop insurance scheme, with significantly lower premium, to cover for loss of crop to natural calamities.
Farmers will pay only 2 per cent of the premium fixed by insurance company for kharif foodgrains/oilseeds crops and 1.5 per cent for rabi foodgrains/oilseeds crops under the Pradhan Mantri Fasal Bima Yojana (PMFBY).
The remaining sum of premium would be borne by the Centre and state governments equally, entailing outgo of Rs 8,800 crore annually by central government for coverage of 50 per cent of the crop area of 194.40 million hectare. The scheme, cleared by the Cabinet, will be rolled out from the coming kharif season beginning June.

After coming to power, the Modi government had announced that it would bring a new crop insurance scheme by replacing the existing ones to ensure higher coverage of crop area at low premium and better claim settlement facilities.
Expressing confidence that farmers will adopt this new scheme, Home Minister Rajnath Singh said it will help them tide over financial uncertainties.
"This new crop insurance scheme will have the lowest premium for farmers in the history of independent India. The new scheme has taken care of the anomalies in the existing two schemes and added new provisions," he told reporters.

Stating that Prime Minister Narendra Modi has himself suggested reducing premium burden on farmers, Parliamentary Affairs Minister Venkaiah Naidu said the farming community will be "very happy" with this scheme.

He observed that farmers get adversely affected by natural calamities in the absence of level-playing field for them. "This path breaking measure will take care of farmers by providing them necessary assurance through this insurance cover."
Agriculture Minister Radha Mohan Singh said the scheme will also cover post-harvest losses and 'prevented sowing'.
"There is no upper limit on the government subsidy. Even if balance premium is 90 per cent, it will be borne by the government," an official statement said.
The government has done away with the provision of capping the premium rate which resulted in low claims being paid to farmers. Now, farmers will get claim against full sum insured without any reduction.

To assess crop damage for early settlement of the claims, the government will adopt modern technology to a great extent.
"Smart phones will be used to capture and upload data of crop cutting to reduce the delays in claim payment to farmers. Remote sensing will be used to reduce the number of crop cutting experiments," the government said.