Modi Government is all set to make some positive changes in its crop insurance scheme, Pradhan Mantri Fasal Bima Yojana. In the revamp, farmers as well as states will get more freedom to be able to choose insurance products for the purpose of risk hedging according to what weather vagary is that particular state prone to. At present, there is no choice for farmers and there is just one insurance type which is responsible for covering risks right from sowing to post harvest.
Farmers in the present scenario end up paying higher premium, however, with the option of customization, farmers and pick and choose the type that suits them. The government has plans to roll out different products for both pre sowing as well as post harvest losses in terms of cyclone rains and showers which are unseasonal.
They are planning to roll out separate products for pre sowing losses, post-harvest losses due to cyclonic rains and losses due to unseasonal rainfall. Thus, the state government in consultation with farmers may choose products that they want to buy and the risks they are looking to cover.
The PMFBY has replaced National Agricultural Insurance Scheme (NAIS) and the modified version of the same scheme. PMFBY gives crop insurance right from pre-sowing to post-harvest against non-preventable natural risks. The premium rate is very low where the farmer pays 2 percent for kharif, 1.5 percent for rabi and 5 percent for both commercial and horticulture crops. The rest of the premium amount is shared between the state and the centre.
The government has also made plans to begin compulsive usage of mobile apps and technology for monitoring of crop health and Crop Cutting Experiments (CCEs).
Image Credit: Quartz
