Tuesday, October 18, 2022

What's Prime Minister Crop Insurance Scheme?

What's Prime Minister Crop Insurance Scheme?
What's Prime Minister
Crop Insurance Scheme?

To remove crop uncertainty of farmers, Narendra Modi's cabinet approved the Pradhan Mantri Fasal Bima Yojana on 13 January 2016. 

Pradhan Mantri Fasal Bima Yojana will reduce the loss of farmers due to natural calamities to some extent by paying the installments of the farmers.

8,800 crore will be spent on this scheme. Under Pradhan Mantri Fasal Bima Yojana, farmers will be asked to pay a premium of 2% for Kharif crop and 1.5% for Rake crop by insurance companies.

This includes very low insurance premiums paid by farmers for crops damaged by natural calamities, which can be easily paid by farmers at all levels. The scheme provides protection not only for Kharif and Rabi crops but also for commercial and horticultural crops. Farmers will have to pay 5% per annum for commercial and horticultural crops.

Major aspects of the scheme:-

Farmers should pay only a 2% uniform premium for all Kharif crops and 1.5% for all Rabi crops. In the case of annual commercial and horticultural crops, the premium will be 5% only.

The rates of premium to be paid by the farmers are very low and the arrears of premium will be paid by the government to the farmers to pay the full amount of insurance for crop loss in case of any natural calamity.

There is no upper limit for government grants. Even if the remaining premium is 0%, the government will pick it up.

Earlier, there was a cap on the premium rate which forced the farmers to pay lesser claims. Now, this has been removed and farmers can claim the full sum insured without any deduction.

The use of technology will be greatly encouraged. Smartphones, remote sensing drones, and GPS technology will be used to collect and upload crop harvesting data to reduce delay in claims.

The allocation for the scheme presented in the 2016-2017 budget is Rs 5,550 crore.

The insurance scheme will be handled by the sole insurance company, Agricultural Insurance Company of India (AIC).

PMFBY is an alternative to the National Agricultural Insurance Scheme (NAIS) and the Modified National Agriculture Insurance Scheme (MNAIS) and is therefore exempt from service tax.

Objectives of the scheme:-

To provide insurance cover and financial assistance to farmers in case of failure of any notified crop due to natural calamities, pests, and diseases.

To stabilize the income of farmers to ensure continuous work in agriculture.

To encourage farmers to adopt innovative and modern methods of agriculture.

Ensuring the flow of credit to the agriculture sector. 




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