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Union Cabinet approves Pradhan Mantri Fasal Bima Yojana

The Cabinet approved Pradhan Mantri Fasal Beema Yojna, a crop insurance scheme aimed to ensure farmers’ welfare.

  • The scheme will offer more insurance with less premium, and lead to rise of purchasing capacity of farmers.

  • The new scheme replaces the existing National Agricultural Insurance Scheme.

  • Government liability on premium subsidy will be shared by central and state governments on fifty-fifty basis.

  • The budget for Crop Insurance will be substantially increased from 2823 crore rupees in 2015-16 to 7750 crore rupees in 2018-19.

  • Remote Sensing, smart phones and drones will be used for quick estimation of crop losses and early settlement of claims.

  • 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.

  • 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. 

  • 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 .

The new Crop Insurance Scheme is in line with One Nation – One Scheme theme.

Comparing the new insurance scheme with the previous schemes:
NoFeature
NAIS
[1999]
MNAIS
 [2010]
PM Crop Insurance Scheme[2016]
1Premium rateLowHigh

Lower than even NAIS
(Govt to contribute 5 times that of farmer)
2One Season – One PremiumYesNoYes
3Insurance Amount coverFullCappedFull
4On Account PaymentNoYesYes
5Localised Risk coverageNo
Hail storm
Land slide
Hail storm
Land slide
Inundation
6Post Harvest Losses coverageNoCoastal areas – for cyclonic rainAll India – for cyclonic + unseasonal rain
7Prevented Sowing coverageNoYesYes
8Use of TechnologyNoIntendedMandatory
9AwarenessNoNoYes (target to double coverage to 50%)

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