The Central government on Wednesday cleared the crop insurance scheme for the farmers across the country. The much awaited scheme – Pradhan Mantri Fasal Bima Yojana (PMFBY) – was cleared by the Union cabinet, headed by Prime Minister Narendra Modi. The scheme, which will be rolled out from the kharif season (monsoon season starting May end) this year, is expected to aid the farmers who have faced two consecutive drought years.
The PMFBY will replace the existing two schemes National Agricultural Insurance Scheme as well as modified NAIS which have had some inherent drawbacks.
Prime Minister Narendra Modi too expressed confidence that the new Crop Insurance Scheme will help bring in a major transformation in the lives of farmers.
“Farmer brothers and sisters, at a time when you are celebrating festivals like Lohri, Pongal and Bihu, the government has given you a gift in the form of Prime Minister’s Crop Insurance Scheme,” he wrote on micro-blogging site Twitter after the Cabinet cleared the proposal.
“I am confident that this scheme, which is inspired by the consideration of farmers’ benefit, will bring about a major transformation to the lives of farmers,” PM Modi added.
The farmers’ premium would be 1.5 per cent for rabi foodgrains and oilseeds crops, while 2 per cent for kharif foodgrains and oilseeds crops. For horticutural and cotton crops it has been fixed at up to 5 per cent for both the seasons. Private insurance companies, along with the Agriculture Insurance Company of India Ltd, will implement the scheme.
All claim liability will be on insurer and the government would give upfront premium subsidy.
According to government officials, PMFBY will increase the insurance coverage to 50 per cent of the total crop area of 194.40 million hectare from the existing level of about 25-27 per cent crop area. The expenditure is expected to be around Rs 9,500 crore.
Under the scheme, there will not be a cap on the premium and reduction of the sum insured. Besides, 25 per cent of the likely claim will be settled directly on farmers account and there will be one insurance company for the entire state as well as farm level assessment of loss for localised risks and post harvest loss.
The new scheme is significant as the country is facing drought for the second straight year due to poor monsoon rains and the government wants to enhance insurance coverage to more crop area to protect farmers from vagaries of monsoon.
(With inputs from the PTI)