Cabinet approves Revamping of Crop Insurance Schemes

3 min read

News:Cabinet has approved 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.

Facts:

About Pradhan Mantri Fasal Bima Yojana (PMFBY):

  • Launched in 2016 by the Ministry of Agriculture and Farmers Welfare.
  • Aim: To provide comprehensive insurance cover against failure of the crop thus helping in stabilising the income of the farmers.
  • Coverage of crops: It covers a) food crops b) oilseed crops and c) annual commercial/horticultural crops.
  • Premium: The prescribed premium is a) 2% for Kharif crops b) 1.5% for rabi crops and c) 5% for commercial and horticultural crops.

About Restructured Weather Based Crop Insurance Scheme(RWBCIS):

  • Launched in 2016 by the Ministry of Agriculture and Farmers Welfare.
  • Aim:To mitigate the hardship of the insured farmers against the likelihood of financial loss on account of anticipated crop loss resulting from adverse weather conditions relating to rainfall, temperature, wind among others.
  • It uses weather parameters as proxy for crop yields in compensating the cultivators for deemed crop losses. 
  • Pay-out structures are developed to the extent of losses deemed to have been suffered using the weather triggers.

About the changes:The following changes are to be undertaken in the crop insurance schemes:

  • The time period for an insurance company to work under the scheme is to be extended to 3 years. 
  • The Central subsidy has been limited to 30% for unirrigated areas/crops and 25% for irrigated areas/crops.
  • Enrolment under the Scheme to be made voluntary for all farmers.
  • Central Share in Premium Subsidy to be increased to 90% for North Eastern States from the existing sharing pattern of 50:50.
  • Technology solutions such as Smart Sampling Technique and Crop cutting are to be adopted under insurance for PMFBY.
  • Flexibility to States/UTs to implement the Scheme with option to select any or many additional risk covers/features.