Govt readies farm safety net with banks, insurers as El Nino looms

New Delhi: The government is working with banks and insurers to expand financial protection for rural households as it prepares for El Nino, the weather phenomenon known for disrupting monsoon rains and agricultural output, people familiar with the matter said.

To mitigate its impact on farm incomes, the Centre is working with these institutions to improve credit access, broaden insurance coverage and quicken claim settlements using technology, including high-resolution satellite data, the people cited earlier told ET.

Also Read: Why a strong El Nino leaves tropical commodities acutely exposed


The government is also reviewing the Pradhan Mantri Fasal Bima Yojana to broaden its coverage.

"A comprehensive strategy is being worked out, which includes bringing more farmers into the formal credit system, especially those not covered by the KCC-MISS scheme," said a government official, requesting anonymity. "This includes interministerial co-ordination and an in-depth review of the availability, accessibility and adequacy of credit facilities for different segments."

The Modified Interest Subvention Scheme (MISS) under the Kisan Credit Card (KCC) provides farmers with short-term agriculture and allied loans.

In 2025-26, the limit of a KCC loan under MISS was increased to Rs 5 lakh, with collateral-free credit raised to Rs 2 lakh per borrower.

The government has also consulted banks on operational issues that may obstructing expansion of coverage under the Pradhan Mantri Fasal Bima Yojana (PMFSBY).

Also Read: El Nino may hit India's monsoon, rice and maize output: FAO

"We have shared our inputs on uniform implementation and capacity building, which includes insurance for non-borrower farmers and challenges in states where land records are not digitised," said a bank executive.

The government is also looking to expand credit cover through the Kisan Rural Investment and Credit Assistance (KRISHIKA) mobile application.