The Centre’s spending on subsidizing the premium paid by farmers for crop insurance will expect to see a 125% jump to Rs 7,000 crores in the next fiscal, thanks to the newly introduced crop insurance program, the Pradhan Mantri Fasal Bima Yojana (PMFBY). A steeper hike in allocation under PMFBY would be seen in 2017-18. It would take a few months to put all in place and necessary infrastructure for estimation of crop losses before rolling out the program on a pan-India basis.
Under PMFBY, the premium paid by farmers would be limited at 2% of the insured value for the more rain-dependent kharif crop and 1.5% for the rabi season, compared with 3.5-8% under the two existing schemes. In the case of horticultural crops, farmers’ premium burden will be 5% of the sum assured.
“With the premium falling to as low as 1.5% of the sum insured under the PMFBY in the rabi season, farmers would be hugely interested in opting for the new crop insurance scheme,” said T Haque, former chairman, Commission for Agricultural Costs and Prices.
The Centre would ask the state government to offer tenancy certificates to suitable farmers.