Govt mulls new crop insurance 

Govt mulls new crop insurance 
Highlights

In an effort to bailout the farmers from natural calamities and disasters, the government plans to launch a new crop insurance scheme in 2016-17. It will have a lower premium for farmers and faster claim settlements. 

The scheme will be launched in 2016-17 with lower premium and faster claim settlements

  • Plans to use drones to assess crop damage faster
  • It will be operational from the forthcoming kharif season
  • It is proposed to charge an average premium of up to 2.5% for foodgrains and oilseeds, 5% for horticulture crops
  • At present, the average premium rate is kept at 5.5%, for high risky crops it is as high as 40%

New Delhi : In an effort to bailout the farmers from natural calamities and disasters, the government plans to launch a new crop insurance scheme in 2016-17. It will have a lower premium for farmers and faster claim settlements.

"We have identified discrepancies in the existing scheme of Modified National Agricultural Insurance Scheme (MNAIS) and come out with a new crop insurance scheme. Once it is approved by the Cabinet, the scheme will be implemented from 2016-17," Agriculture Minister Radha Mohan Singh said here.

Under the proposed crop insurance scheme, the premium to be charged from farmers will be kept lower and focus will be on early settlement of claims. New technologies, including drones, will be used to assess crop damage faster, he said.

On January 6, the sticky issue of premium was discussed at length at a meeting with ministerial colleagues by Prime Minister Narendra Modi. Apparently, the concerns have been addressed and the proposal will be taken before the Cabinet at the earliest.

After the PM's meeting, Singh had said, "We will address all the issues and take the proposal before the Cabinet at the earliest so that the scheme can be implemented from the forthcoming kharif season from June."

In the Cabinet note, the Agriculture Ministry has proposed an average premium of up to 2.5 per cent for foodgrain and oilseeds crops and 5 per cent for horticulture crops. However, some sections within the Cabinet want a lower premium. It has estimated the expenditure at Rs 8,000 crore if 50 per cent of the total crop area of 194 million hectare is insured.

The proposal on the new crop insurance scheme, moved by the Agriculture Ministry, was once discussed at a Cabinet meeting last year, but the decision was deferred in the wake of differences over the premium rate. In the existing MNAIS, the average premium rate for farmers has been kept at 5.5 per cent though the premium rate for high risky crops is as high as 40 per cent. Last year, only 27 per cent of the crop area was insured, which costs Rs 3,150 crore to the national exchequer.

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