Madhya Pradesh is planning to firm up a new crop insurance scheme, which would compensate farmers even against the drop in returns due to a crash in commodity prices, said chief minister Shivraj Singh Chouhan.
Once the scheme is implemented, MP will become the first state in India to do so, he said.
The state government would also set up a farmers’ welfare fund, with an initial capital of R1,000-2,000 crore, and may offer subsidised loans to farmers for purchases of inputs to mitigate the impact of a potential drought this year, Chouhan said.
Since the existing insurance scheme doesn’t adequately compensate farmers against losses due to vagaries of weather, Chouhan held a series of meetings recently on the proposed scheme and sought inputs from various stakeholders, including the central government. Apart from the loss due to a plunge in prices of produce, the proposed scheme would also cover the loss in productivity due to erratic weather. It would also provide cover for up to 80% of the crop losses. The state would fix minimum returns for farmers upon which compensation would be calculated in case of a crash in commodity prices or even crop failure.
The India Meteorological Department has forecast a 12% drop in seasonal monsoon showers this year from the benchmark average and predicted the worst rainfall deficit of 15% for north-western regions, which also include Madhya Pradesh.
Separately, Rajesh Rajora, principal secretary, state farmers welfare and agriculture development department, said the premium to be paid by farmers would depend upon their average farm income — to be calculated by factoring in minimum support prices of crops and the farm gate prices. If implemented, farmers will also be insured against post-harvest losses, he added. The state is also seeking funds from the central government to support the scheme.
To ensure adequate infrastructure to make the scheme a success, the state government has also sought help from institutions like the Indian Space Research Organisation (Isro) and NRSC. This is because the state requires remote sensing equipment to determine actual crop losses, more than 3,000 automated weather stations and roughly 25,000 automated rain gauges.
‘MP to be No. 1 in farm output’
Chouhan said Madhya Pradesh, which is now the biggest grower of pulses, third-largest producer of food grains and second-biggest grower of oilseeds, set its sight on becoming the biggest producer of farm items in the next ten years. Currently, the state trails Uttar Pradesh and Punjab in grain production and Gujarat in oilseed output. It accounts for just under 10% in the country’s grain production and over 20% in oilseed output. (Travel for this report was sponsored by the MP govenrment)