About 60% of India?s rural households depend on agriculture as their means of livelihood. For many years, government has supported the sector with many policies. The latest is that around crop insurance- Pradhan Mantri Fasal Bima Yojana (PMFBY).
Launched on 13th January 2016, the scheme aims at mitigating the extraneous risks around crop production in the country. Through this blog post, I want to share some key features of this scheme:
– Though announced in January this year, the scheme will be effective from the upcoming Kharif season starting in June. The total budget set aside for the scheme is Rs. 17,600 Crore, of which Rs 5,501 crore has been set aside for 2016-17. [Source]
– The premium charges are fixed as:
1) For Kharif crops the premium would be up to 2%
2) For Rabi crops, the premium would be up to 1.5%
3) For annual commercial and horticultural crops (including cotton), it would be up to 5%
– The scheme promotes technology and innovation, allowing farmers to adapt to precision agriculture. With the mandatory use of smart phones, remote sensing technology and even drones to estimate losses, assess compensation, and settle claims without delay; the scheme brings more to the table than just insurance.
-The Centre has named state-owned Agriculture Insurance Company of India (AIC) and 10 private companies, including ICICI-Lombard General Insurance, HDFC-ERGO General Insurance, IFFCO-Tokio General Insurance and SBI General Insurance, for implementation of the mega scheme.
-According to the Ministry of Agriculture and Farmers? Welfare, the center is going to make banks responsible for getting more number of farmers under PMFBY. However, it is interesting to note that while the scheme is open to all farmers, it is not mandatory to anyone. [Source]
The insurance scheme comes at an opportune time when we all are fighting the challenges and risks posed by climate change and many extraneous factors. While adopting technology to mitigate these risks and predict some of these challenges is a long term solution, the scheme provides immediate relief and support to the farmers.