The government announced the 'Prime Minister's Crop Insurance Scheme', in a bid to allay the growing disenchantment among Indian farmers.
The Rs.17,600 crore scheme will be rolled out from kharif season starting June'16.
The scheme seeks to overcome the shortfalls that previous schemes faced.
The most prominent feature of the scheme is the very low premium so as to attract maximum participation from farmers.
Lowest premium to attract farmers
The new crop insurance scheme will reduce the premium to one-tenth of the existing rates. "This new crop insurance scheme will have lowest premium for farmers in the history of Independent India," - Rajnath Singh, Union Home Minister.
Distress situation in rural India
Rural India, primarily agrarian, is facing consistent droughts and un-seasonal rains which have affected 207 districts in 9 states covering 90 lakh hectares land.
Two-thirds of the population living in rural areas is reeling under harsh conditions, consequently affecting the economy due to subdued demand.
Higher premiums and low awareness have restricted farm insurance cover to 23%.
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Gift to farmers
"Farmer brothers and sisters, at a time when you are celebrating festivals like Lohri, Pongal and Bihu, the government has given you a gift in the form of Prime Minister's Crop Insurance Scheme," PM Narendra Modi tweeted after the launch of the scheme.
Salient features of PMFBY
Unlike previous Modified National Agriculture Insurance Scheme, Pradhan Mantri Fasal Bima Yojana (PMFBY) does not limit the premiums, ensuring that farmers can get higher claims.
The scheme has a much wider coverage which includes planting risks, yield loss, post harvest loss, localized risks like inundation, landslides, etc.
25% of the claim will be immediately settled in the farmers bank account.
Technologically friendly scheme
An important aspect of the scheme is the purported use of technology. The government plans to use modern technologies such as smartphones, remote sensing, etc. for quicker yield loss and crop loss estimation.
Not a panacea for all woes
A single scheme cannot solve the issues facing the agriculture sector.
Experts state that awareness will have to be generated to ensure that the target of covering minimum 50% of the farmers is reached.
They add that it may require follow-ups at the highest level akin to the Jan Dhan Yojana.
Insurance fraud, a major obstacle, will also have to be looked into.
PM launches 'Fasal Bima Yojna'
PM Modi launched the 'Fasal Bima Yojna' for farmers which would be effective from this kharif season while addressing the Kisan Kalyan Mela at Sehore, MP.
In this scheme, farmers can get claims against full sum insured without deductions.
Farmers need to pay a uniform premium of 2% for kharif crops, 1.5% for rabi crops and 5% for the horticultural and annual cash crops.