Cabinet defers decision on new crop insurance scheme

NEW DELHI: Cabinet today deferred the decision on new crop insurance scheme, which aims to keep premium burden on farmers below 3 per cent, seeking more discussions on the issue.

"The Cabinet deferred the decision on new crop insurance scheme proposal of the Agriculture Ministry. The decision was deferred as it wanted more discussion on the issue," sources said.

The decision could not be taken in the absence of Home Minister Rajnath Singh, who has contributed significant inputs to the new scheme, they added.

In a Cabinet note, the Agriculture Ministry has proposed a premium of 3 per cent required to be paid by farmers. And for the benefit of farmers in vulnerable and disaster-prone areas, the ministry has recommended premiums without any cap unlike the existing scheme MNAIS.

Of the total premium fixed by the insurers under the existing crop insurance schemes NAIS and MNAIS, farmers are presently paying a premium of up to 3.5 per cent and 8 per cent, respectively, and the rest is borne by the government.

On an average, insurance firms are charging an overall premium in the range 1 to 20 per cent for crops.

Under the Modified National Agricultural Insurance Scheme (MNAIS), premiums are capped at 13 per cent in most vulnerable areas for kharif crops, while at 11 per cent for rabi crops.

The ministry has proposed rolling out of the proposed scheme in the ongoing rabi season that started from October.

About 20 per cent (40.27 million hectare) of the total farm land is insured under the existing schemes, as per government data.

Maximum area insured is in Rajasthan at 12.26 million hectare, followed by Bihar, Karnataka, Maharashtra, Gujarat, Uttar Pradesh and Andhra Pradesh.

Major crops insured are oilseeds, rice, wheat, pulses and coarse grains.

The Centre is implementing various farm insurance schemes since 1985 to insulate farmers against agri-risks.

At present, it is offering three crop insurance schemes -- National Agricultural Insurance Scheme (NAIS), Modified NAIS and weather-based crop insurance scheme.