 "A farmer sprays a mixture of fertilizer and pesticide onto his wheat crop on the outskirts of Ahmedabad")
The government will launch a new crop insurance scheme next month, which aims to keep the premium burden on farmers below 3%, Agriculture Minister Radha Mohan Singh said today.
"We will announce a new crop insurance scheme in January as a new year gift to farmers. Currently, premium rates are as high as 40% in some states.
"Under the new scheme, premium will be brought down significantly, Singh said after launching a mobile app on crop insurance and agri-market here.
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Besides low premium, there will be a mechanism in place to ensure that crop insurance claims are settled early, he added.
"We are coming out with a crop insurance system that is science-based as well as free from the patwari system. We will use new technologies like drone to assess the crop loss and settle claims at the earliest," Singh said.
The Cabinet had, on December 2, discussed the proposal on new crop insurance scheme, which was moved by the Agriculture Ministry. But the decision was deferred due to differences over the premium issue. The proposal will soon be discussed again.
In a Cabinet note, the Agriculture Ministry has proposed a premium of 3% 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 (Modified National Agricultural Insurance Scheme).
Of the total premium fixed by the insurers under the existing crop insurance schemes NAIS (National Agricultural Insurance Scheme) and MNAIS, farmers are paying a premium of up to 3.5% and 8%, respectively, and the rest is being borne by the government.
On an average, insurance firms are charging an overall premium in the range between 1 and 20% for crops.
Under MNAIS, premiums are capped at 13%, in most vulnerable areas for kharif crops, while 11% for rabi crops.
About 20% (40.27 million hectare) of the total farm land is insured under the existing schemes, as per the government data.
Rajasthan has the maximum area insured at 12.26 million hectare followed by followed by Bihar, Karnataka, Maharashtra, Gujarat, Uttar Pradesh and Andhra Pradesh.
Major crops insured are oilseeds, rice, wheat, pulses and coarse grains.
The Centre is implementing various farm insurance schemes since 1985, to insulate farmers against agri-risks.
At present, it is offering three crop insurance schemes -- NAIS, MNAIS and weather-based crop insurance scheme.
