Ministers panel discusses new crop insurance scheme

A group of ministers headed by Home Minister Rajnath Singh today discussed proposed new crop insurance scheme that aims to bring down premium charges up to 3 per cent and provide maximum coverage for crops to farmers.
Under the existing crop insurance schemes NAIS and MNAIS, insurance companies on an average are charging premium in the range of 1-20 per cent of the value of crops.
Of the total premium fixed by insurers, farmers are paying a premium of up to 3.5 per cent and 8 per cent for NAIS and MNAIS, respectively, and the rest is borne by government.

"A group of ministers (GoM) today discussed in detail the Agriculture Ministry's proposal on new crop insurance scheme. The proposal is to ensure farmers pay minimum premium and get maximum coverage," sources said.
Finance Minister Arun Jaitley, Agriculture Minister Radha Mohan Singh and Heavy Industries Minister Anant G Geete were present in the meeting.
According to sources, the GoM deliberated on bringing down the crop insurance premium to below five per cent from the existing levels as well as on insurance payment to farmers in the shortest possible time.

The panel also discussed about fixing premium based on rainfed, irrigated and hilly areas, and also emphasised on the need to put in place a proper implementation mechanism to ensure crop insurance is made compulsory for all so that farmers' interest is protected, they added.

The Agriculture Ministry has already received comments from other ministries on this issue. The GoM views will be incorporated while finalising the Cabinet note.
The Ministry has proposed a premium of three per cent required to be paid by farmers. And for the benefit of farmers in vulnerable and disaster-prone areas, the ministry has recommended premiums without any cap unlike the existing scheme MNAIS.
Under the Modified National Agricultural Insurance Scheme (MNAIS), premiums are capped at 13 per cent in most vulnerable areas for kharif crops, while at 11 per cent for rabi crops.
The proposed scheme will be available to both loanees and non-loanees. It would be compulsory for loanee farmers to avail crop loan from financial institutions. Even private insurers would be allowed to offer the scheme.

According to sources, the ministry is aiming to roll out the scheme in the ongoing rabi season that started last month.
Currently, about 20 per cent (40.27 million hectare) of the total farm land is insured under the existing schemes, as per government data.
Maximum area insured in Rajasthan was at 12.26 million hectare, followed by Bihar, Karnataka, Maharashtra, Gujarat, Uttar Pradesh and Andhra Pradesh.