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The government has made its flagship crop insurance schemes voluntary for farmers with existing crop loans or those willing to take new ones, as it seeks to address the concerns raised by farmers' body and states in implementation of these programmes.
"The Union Cabinet has approved the revamping of 'Pradhan Mantri Fasal Bima Yojana (PMFBY)' and 'Restructured Weather Based Crop Insurance Scheme (RWBCIS)' to address the existing challenges in implementation of crop insurance schemes," an official statement said.
Under the PMFBY, which was launched in February 2016 by Prime Minister Narendra Modi, it is mandatory for loanee farmers to take insurance cover under this scheme.
The PMFBY provides comprehensive crop insurance from pre-sowing to post-harvest period against non-preventable natural risks at extremely low premium rate of 2 per cent for kharif crops, 1.5 per cent for rabi crops and 5 per cent for horticulture and commercial crops.
The Cabinet approved the modification of certain parameters/provisions of ongoing PMFBY and RWBCIS schemes.
"Enrolment under the scheme to be made voluntary for all farmers (both PMFBY/ RWBCIS)," Agriculture Minister Narendra Singh Tomar told reporters in New Delhi.
He said currently 58 per cent of total farmers are loanee and the remaining 42 per cent are non-loanee. The number of farmers opting for these crop insurance schemes may drop immediately but the enrolment would eventually pick up, Tomar said.
The minister said the government would launch a campaign for creating awareness among farmers about the need to take a crop insurance policy.
These modifications will help in addressing the concerns raised about the PMFBY scheme by farmers organisations and states, he said.
Among other modification, Tomar said the allocation of business to insurance firms through tender process would be done for three years as against the current policy of one to three years.
"Central share in premium subsidy to be increased to 90 per cent for north eastern states from the existing sharing pattern of 50:50 (both PMFBY/RWBCIS)," the statement said.
Tomar said states will not be allowed to implement these schemes in subsequent seasons in case of considerable delay in release of requisite premium subsidy to insurance companies beyond a prescribed time limit. Cut-off dates for invoking this provision for Kharif and Rabi seasons will be March 31 and September 30 of successive years, respectively.
The Cabinet also approved provisioning of at least 3 per cent of the total allocation for the scheme to be made by the Centre and implementing state governments for administrative expenses.
For estimation of crop losses/admissible claims in the PMFBY, two-step process will be adopted based on defined deviation matrix using specific triggers like weather indicators, satellite indicators, etc, for each area along with normal ranges and deviation ranges. Only areas with deviations will be subject to crop cutting experiments (CCEs) for assessment of yield loss.
Technology solutions like Smart Sampling Technique (SST) and optimisation of number of CCEs would be adopted in conducting CCEs. In case of non-provision of yield data beyond cut-off date by the states to implementing insurance firms, claims will be settled based on yield arrived through use of technology solution.
The central subsidy under PMFBY/RWBCIS to be limited for premium rates up to 30 per cent for un-irrigated areas/crops and 25 per cent for irrigated areas/crops. Districts having 50 per cent or more irrigated area will be considered as irrigated area/district.
States have been given flexibility to implement the schemes with option to select any or many of additional risk covers/features like prevented sowing, localised calamity, mid-season adversity, and post-harvest losses. Further, states/UT can offer specific single peril risk/insurance covers, like hailstorm etc, under PMFBY even with or without opting for base cover (both PMFBY/RWBCIS).
"As the scheme is being made voluntary for all farmers, therefore, to provide financial support and effective risk mitigation tools through crop insurance especially to 151 districts which are highly water stressed including 29 which are doubly stressed because of low income of farmers and drought, a separate, scheme in this regard would also be prepared," the statement said.
The concerned provisions/parameters of scheme and operational guidelines of the PMFBY and RWBCIS would be modified to incorporate these modifications and made operational from Kharif 2020 season.
"With these changes, it is expected that farmers would be able to manage risk in agriculture production in a better way and will succeed in stabilising the farm income. These changes will also enable quick and accurate yield estimation leading to faster claims settlement," the statement said.