New Delhi: Amid growing hardships of the farmers on account of deficient rains in past two years, the Union Cabinet on Wednesday approved the much awaited new crop insurance policy, which has been named Pradhan Mantri Fasal Bima Yojna.
The government will bear the lion’s share of the insurance premium at a likely cost of Rs 8,800 crore a year to implement the scheme.
In contrast to the earlier policy, in which the farmers had to pay about 15 per cent of the premium, the new scheme has capped it at mere two per cent (kharif) and 1.5 per cent (rabi) crops.
The Centre and states would share rest of the premium in equal proportion.
While the current coverage of crop insurance is only 20 per cent, the Centre is expecting to enhance it to 50 per cent in two years’ time, after which the Centre’s obligation would be about Rs 8,800 crores.
Union agriculture minister Radha Mohan Singh has said that the new scheme would come in force in the upcoming kharif sowing season.
Mr Singh added that the scheme will also cover post-harvest losses and “prevented sowing”.
“There is no upper limit on the government subsidy. Even if balance premium is 90 per cent, it will be borne by the government,” the government stated in a media statement.
As reported earlier, the new scheme has done away with the provision of capping the premium rate which resulted in low claims being paid to farmers.
