‘Crop insurance scheme a gamechanger’

Stating that the revamped insurance schemes being launched by the government have the potential to reduce distress in the farm sector, Union finance minister Arun Jaitley on Tuesday said that they would be rolled out in a ‘mission mode’ from April 1, 2016 to cover kharif crops. He launched the Pradhan Mantri Fasal Bima Yojana and the Unified Package Insurance Scheme in Mumbai.

Mr Jaitley, said though the country had crop insurance schemes in the past, those were mainly linked to the crop loans and therefore met with a modest level of success. “This is a crop insurance scheme with a difference, and the difference is absolutely critical to the Indian farmer,” he said. Mr Jaitley added that since the new scheme was dependent on large volume, it would cover much larger risks at a very low premium. The farmers’ premium would be 2 per cent for kharif food grains and oilseeds crops and 1.5 per cent for rabi crops. In the event of a crop failure, a farmer would be paid more. The minister said the government aimed to cover 50 per cent of farmers, mostly those depending upon rain-fed agriculture.

Mr Jaitley said with two successive deficit monsoons behind us, poor rainfall this year would put the systems to test. He asserted that in that event, the successful implementation of the new crop insurance scheme could become a game changer. He said the entire strength of the Indian banking, insurance and financial system would be mobilised to ensure its success.

He said, “The scheme has the potential to reduce distress in the farm sector and end the scar of farmer suicides affecting parts of our country. It was a significant step towards making India an ‘insured and pensioned society.”

The new crop insurance scheme also provides for a change in criteria to determine crop losses by providing local level assessment for calamities like hailstorms etc. Simple technology through phones and remote sensors would be used for quick estimation and early settlement of claims.

Earlier, Mr Jaitley launched the Nabard Agri Credit Monitoring portal, which will help financial institutions to monitor the status of agricultural loans given to farmers. He also unveiled roadmap of E-Shakti Expansion Programme of digitalisation of self-help groups.

Anjuly Chib Duggal, secretary, department of financial services, said the new crop insurance scheme had been drafted with intense consultations with concerned stakeholders. She urged that the schemes should percolate to the ground level by bringing large mass of farmers in the insurance net.