Cabinet okays changes to crop insurance schemes, makes PMFBY voluntary

New Delhi: The Union Cabinet, chaired by the Prime Minister Narendra Modi has approved revamping of the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS) to address the existing challenges in the implementation of Crop Insurance Schemes.

It is proposed to modify certain parameters/provisions of ongoing schemes of PMFBY and RWBCIS under which allocation of business to insurance companies to be done for three years for both PMFBY and RWBCIS.

States/UTs shall have an option to choose the scale of finance or district level Value of Notional Average Yield (NAY), that is NAY Minimum Support Price (MSP), as the sum insured for any district crop combination (both PMFBY and RWBCIS). Farmgate price will be considered for the other crops for which MSP is not declared.

Central subsidy under PMFBY and RWBCIS to be limited for premium rates up to 30% for unirrigated areas/crops and 25% for irrigated areas/crops. The districts which have 50% or more irrigated area will be considered as irrigated area/district.

There would be flexibility for the states and UTs to implement the scheme with an option to select any or many of additional risk covers or features like prevented sowing, localised calamity, mid-season adversity, and post-harvest losses.

States will not be allowed to implement the Scheme in subsequent seasons in case of considerable delay by States in the release of requisite premium subsidy to concerned insurance companies beyond a prescribed time limit. The cut-off dates for invoking this provision for Kharif and Rabi seasons will be 31 March and 30 September of successive years respectively (Both PMFBY/RWBCIS).

For estimation of crop losses & admissible claims, a two-step process is to be adopted based on defined deviation matrix, using specific triggers like weather indicators and satellite indicators for each area along with normal ranges and deviation ranges. Only areas with deviations will be subject to Crop Cutting Experiments (CCEs) for assessment of yield loss (PMFBY). Technology solutions like Smart Sampling Technique (SST) and optimization of the number of CCEs to be adopted in conducting CCEs (PMFBY).

In case of non-provision of yield data beyond cut-off date by the States to implementing insurance companies, claims to be settled based on yield arrived through the use of Technology solution (PMFBY alone).

The Central share in premium subsidy to be increased to 90% for the North Eastern States from the existing sharing pattern of 50:50 (Both PMFBY/RWBCIS).

Further, the enrolment under the scheme to be made voluntary for all farmers. Provisioning of at least 3% of the total allocation for the Scheme to be made by Government of India and the implementing State Governments for administrative expenses. This shall be subject to an upper cap fixed by the Department of Agriculture Cooperation & Farmers Welfare (DAC&FW) for each State (Both PMFBY/RWBCIS).

Besides, DAC&FW in consultation with other stakeholders/agencies will prepare/develop state-specific, alternative risk mitigation programs for crops or areas which have a high rate of premium.

Further, the scheme is being made voluntary for all farmers. To provide financial support and effective risk mitigation tools through crop insurance especially to 151 districts which are highly water-stressed including 29 which are doubly stressed because of low income of farmers and drought, a separate, scheme in this regard would also be prepared.

The concerned provisions/parameters of the scheme and operational guidelines of the PMFBY and RWBCIS shall be modified to incorporate the above said modifications and shall be made operational from Kharif 2020 season.

With these changes it is expected that farmers would be able to manage risk in agriculture production in a better way and will succeed in stabilising their income. 

Further, it will increase coverage enabling farmers of the North East Region to manage their agricultural risk in a better way. These changes will also enable quick and accurate yield estimation leading to faster claims settlement. 

These changes are proposed to be implemented from Kharif 2020 season throughout the country.

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The ID Staff

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