Crop insurance scheme likely to give more flexibility to states and farmers


NEW DELHI: The government is planning to revamp its flagship crop insurance scheme – Pradhan Mantri Fasal Bima Yojana (PMFBY) – by giving more flexibility and freedom to states and farmers in choosing insurance products for risk hedging as per the proneness of the particular state to the specific weather vagary. Currently, farmers across the country don’t have any choice. There is one single comprehensive insurance product, which covers risks right from pre-sowing to post harvesting.

“Every farmer who wants crop insurance has to take this comprehensive product without any customisation. This leads to payment of a higher premium. We want to break up this single product and give farmers multiple options in a bouquet of insurance products so that they can take their pick based on their need,” said a senior agriculture ministry official.

He said that in the current scheme, suppose a farmer in Bihar doesn’t want to take risk coverage for drought or a farmer in Rajasthan wants to opt out from flood coverage, there is no provision.


“We are planning to roll out separate products for pre sowing losses, post-harvest losses due to cyclonic rains and losses due to unseasonal rainfall. State government in consultation with farmers may decide on products they want to buy and the risk they want to cover,” the official said.

The PMFBY has replaced the existing two crop insurance schemes — the National Agricultural Insurance Scheme (NAIS) and the Modified NAIS. It provides comprehensive crop insurance from pre-sowing to post-harvest period against non-preventable natural risks at extremely low premium rates a farmer has to pay – 2% for kharif crops, 1.5% for rabi crops and 5% for horticulture and commercial crops. The balance amount of premium is equally shared by central and the respective state governments.

The penetration of crop insurance scheme has increased to 30% of gross cropped area in the country from 23% in previous crop insurance schemes in 2015-16. The coverage of non-loanee farmers, for whom the coverage is voluntary, has increased from 5% in 2015-16 to 42% during Kharif 2019, which shows the acceptability and progress of the scheme on voluntary basis.

“We are also considering to make this insurance voluntary for loanee farmers also for whom this is mandatory now. We expect that after knowing the importance of this scheme, farmers would voluntarily participate in this scheme,” the official said.

The government is also planning to involve compulsorily use of technology and mobile applications for monitoring of crop health and Crop Cutting Experiments (CCEs) in coordination with concerned states.

“We would be adopting technology, such as satellite and UAV remote sensing, for various applications such as crop area estimation and yield disputes and also promote the use of remote sensing and other related technology for CCE planning, yield estimation, loss assessment, assessment of prevented sowing and clustering of districts. This will help in reaching to a scientific and more accurate conclusion on yield and losses estimations,” the official said.

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