In a major farm sector sop, the Centre today announced a new Rs 17,600-crore crop insurance scheme to cover loss of crops due to natural calamities like drought at a very low premium payout by farmers.
Prime Minister Narendra Modi described the scheme wherein the Centre will provide Rs 8,800 crore annually to make up for almost all of the premium for the crop insured, as a move “that will transform the lives of the farmers in a big way”.
Under the scheme Pradhan Mantri Fasal Bima Yojana (PMFBY), the state will also provide a matching contribution while farmers will pay only only 2 per cent of the premium fixed by the insurance company for kharif foodgrains/oilseeds crops and 1.5 per cent for rabi foodgrains/oilseeds crops.
Premium will be 5 per cent for horticultural and commercial crops for both seasons. The scheme will be rolled out from the coming kharif season starting June.
After the Cabinet approved the scheme, Modi said, “This is a historic day. I am confident that this scheme, which is inspired by the consideration of farmers’ benefit, will bring about a major transformation to lives of farmers.”
The scheme includes successful aspects of the existing schemes and “effectively addresses” whatever was lacking in those schemes, he tweeted.
Modi further said, “The scheme has the lowest premium, it entails easy usage of technology like mobile phone, quick assessment of damage and disbursement within a time frame.”
The definition of disaster has been expanded to include aspects like flooding of crop and damage after harvest, Modi said, adding “special attention” has been paid to several other aspects.
“It is easy to subscribe to the scheme and easy to benefit. So, do join it,” he told the farming community, which of late has seen a spate of suicides.
The government aims to cover 50 per cent of the crop area of 194.40 million hectares in the next three years under the new scheme, from the existing level of around 25 per cent.
Among key features, there will be no provision of capping the premium rate so as to ensure farmers get a higher claim against the full sum insured. At least 25 per cent of the likely claim will be settled directly on farmers’ bank account.
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 lowest premium for farmers in the history of Independent India,” Singh said.