Government okays low premium crop insurance scheme for farmers

To be rolled out from the kharif season this year, the much awaited scheme _ Pradhan Mantri Fasal Bima Yojana _ was cleared at the Cabinet meeting, headed by Prime Minister Narendra Modi on Wednesday. PMFBY will replace the existing two schemes National Agricultural Insurance Scheme as well as Modified NAIS which have had some inherent drawbacks. 

“The cabinet has cleared the Agriculture Ministry’s proposal on new crop insurance scheme,” sources said.  It has approved farmers’ premium between 1.5 to 2 per cent for foodgrains and oilseeds crops, and up to 5 per cent for horticultural and cotton crops, they said. 

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 horticultural and cotton crops it has been fixed at up to 5 per cent for both the seasons. 

In PMFBY, there will not be a cap on the premium and reduction of the sum insured, they said. 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.  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.