Indian agriculture employs nearly ½ of it’s total workforce. Hence, it’s health is crucial for any sustainable socio-economic upliftment of the masses. However, being overly dependent on monsoons, it is exposed to multiple factors. Thus crop insurance plan assists in the stabilization of crop production and related income of the farmers.
Need for crop insurance:
Farmers:
- Unpredictability:66% of Indian agricultural land are solely dependent on monsoons which are highly unpredictable due to climatic phenomenon like EL NINO, ENSO.
- Protection from disasters:India is vulnerable to disasters like floods, cyclones, droughts which greatly harms the agricultural produce.Hailstorms, cloud burst etc. add to the uncertainty.
- Financial support to farmers: It provides yield and revenue protection to farmers.
Banks:
- Even during calamities it increases the payment capacity of debitors (farmers).
- It avoids the risk of non-payment at the time of crop damage/failure
Government:
- Reduces burden of relief packages at time of calamities.
Thus, recognizing the need of insurance and archaic nature of NAIS (National Agriculture Insurance Scheme) Government introduced PMFBY (PM FasalBimaYojana) with an aim to bring 47% of farmers under this scheme within an year, replacing the earlier NIAS and MINAS.
Salient features:
- Comprehensive coverage: Scheme targets to cover 50% India’s cropped area in next 3 years. It includes Rabi, Kharif crops and Horticulture crops.Apart from hailstorms, unseasonal rains, landslides and inundation like calamities, this scheme will also includes post harvest losses.
- Low premium: Premium under the scheme has been decreased. It is 2% – Kharif; 1.5% – Rabi and 5% – horticulture of the sum insured. In the case of Weather-Based Crop Insurance, premium rates would be rationalized on par with PMFBY.
- Insuring authority: There will be one insurance company for the whole state. Private insurance companies will be allowed along with Agriculture Insurance Company of India Limited.
- Aided by technology: Remote sensing, smart phones and drones are used for quick estimation of crop loss.
- No cap on govt subsidy: The liability on premium subsidy will be shared equally by the Centre and states, which promotes cooperative federalism.
This new Crop Insurance Scheme is in line with One Nation – One Scheme theme. PMFBY has potential to safeguard farmers against vagaries of nature, This requires multi-stakeholder approach – including state govt, local govt, technocrats.
