Why in News?
- Under the Pradhan Mantri Fasal Bima Yojana (PMFBY), the claims paid to the farmers have dropped by 48.7 per cent in the current year.
- In a surprise to the experts, this decline, in the farmer’s claims, has been registered despite the overall rise in farmer’s enrolment in the scheme this year.
- According to the government, the scheme had already become the number one crop insurance scheme in the world in terms of farmer applications enrolled. In terms of gross premium, the scheme is the third largest in the world.
- The PMFBY is the scheme that provides the farmers their comprehensive risk insurance against crop damage owing to the non-preventable natural risks.
- Devinder Sharma, agriculture expert, said farmers seemed to have lost faith in the scheme. He said, “The problem is that the loss is evaluated at village level rather than individual cases.”
What is Pradhan Mantri Fasal Bima Yojana?
- Launched in 2016 and is being administered by the Ministry of Agriculture and Farmers Welfare.
- It replaced the National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS).
- The risk is counted from pre-sowing to post-harvest for the crops/areas notified by the concerned state government.
- Farmers including sharecroppers and tenant farmers growing notified crops in the notified areas are eligible for coverage.
- To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests & diseases.
- To stabilize the income of farmers to ensure their continuance in farming.
- To encourage farmers to adopt innovative and modern agricultural practices.
- To ensure the flow of credit to the agriculture sector.
- There will be a uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops.
- In the case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5%.
- The premium rates to be paid by farmers are very low and the balance premium will be paid by the Government to provide full insured amount to the farmers against crop loss on account of natural calamities.
- There is no upper limit on Government subsidies. Even if the balance premium is 90%, it will be borne by the Government.
- Earlier, there was a provision of capping the premium rate which resulted in low claims being paid to farmers.
- This capping was done to limit Government’s outgo on the premium subsidy.
This capping has now been removed and farmers will get a claim against the full sum insured without any reduction.
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