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Government set to launch new crop insurance scheme

The government will launch the much-talked about new crop insurance scheme, which aims to keep a lower premium for farmers and faster settlement of claims, in 2016-17.

  • Under the proposed crop insurance scheme, the premium to be charged from farmers will be kept lower and focus will be on early settlement of claims.

  • New technologies, including drones, will be used to assess crop damage faster, he said.

  • Currently, farmers have to pay premium ranging from 4 to 15 per cent to insure crops.

Example: the case of Lalitpur in Uttar Pradesh’s Bundelkhand region, where the actual premium for paddy is 22 per cent of the sum insured and farmers have to pay a premium as high as 5.75 per cent.

  • New Crop Insurance Scheme through which it will bring down the rate of premium to be paid by farmers to a maximum of 2.5 per cent of the sum insured.

  • The remaining premium will be paid by the Centre and the state governments .

  • It has estimated the expenditure at Rs 8,000 crore if 50 per cent of the total crop area of 194 million hectare is insured.

  • In 2015 only 27 per cent of the crop area was insured, which cost Rs 3,150 crore to the national exchequer.

  • Under the new formula, a farmer will not have to pay more than 2.5 per cent of the sum insured as premium for kharif crops (paddy, maize, millet, etc), 2 per cent for all rabi crops except wheat, 1.5 per cent for wheat and 2 per cent for all pulses.

  • The proposal also envisages a cap of 5 per cent on premium a farmer has to pay to get horticulture crops (including fruits, vegetables and commercial crops) insured.

  • By lowering premiums substantially, the government is banking on increasing the coverage of farmers from the existing 23 per cent to 50 per cent in the next two to three years.

  • While Uttar Pradesh, Rajasthan, Uttarakhand, Kerala and a few districts in Andhra Pradesh have notified the existing crop insurance scheme, states like Punjab and Haryana have not done it so far.

  • The new scheme will also seek to address a long-standing demand of farmers and provide farm-level assessment for localised calamities, including hailstorms, unseasonal rains, landslides and inundation.

  • The government is planning to use smartphones to capture crop cutting data to reduce the time taken to finalise yield data .

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