Gujarat to junk crop insurance scheme, set up own fund

GANDHINAGAR: The Vijay Rupani government is set to replace the existing crop insurance scheme and set up a separate fund to compensate for crop failure. The state government has got an in-principle nod from the Centre for the fund, sources said.

While details are yet to be worked out, the fund will have an annual corpus of more than Rs 3,000 crore. Sources said that the Centre has agreed to continue providing its 50% share of the insurance premium paid to private firms until now.

The move comes on the heels of major unrest among farmers across the state who alleged high rate of rejection of claims by insurance companies and non-settlement of claims for months on end.


In 2018, farmers, the Centre and state government collectively paid Rs 3,031 crore - of which Rs 365 crore was paid by farmers - towards premium for crop insurance. Companies reimbursed claims worth only Rs 2,050 crore.

While private companies have been earning a windfall out of premium paid every year, the state government earned the ire of farmers for inadequate compensation of their farm losses.