NEWS – Union Cabinet Extends Crop Insurance Schemes and Fertiliser Subsidy

Extension of Crop Insurance Schemes

HIGHLIGHTS

• Approved Schemes:
  • Pradhan Mantri Fasal Bima Yojana (PMFBY) and
  • Restructured Weather Based Crop Insurance Scheme (RWBCIS) extended until FY26.
• Increased Outlay:
  • Enhanced total allocation to ₹69,515.71 crore for 2021-22 to 2025-26 (up from ₹66,550 crore for 2020-21 to 2024-25).
• Innovation and Technology Fund:
  • Creation of Fund for Innovation and Technology (FIAT) worth ₹824.77 crore.
• Remote-Sensing Technology:
  • To identify crop damage for insurance purposes.

Key Achievements in Crop Insurance

• Coverage:
  • Crop insurance provided to 4 crore farmers, with 88% being small and marginal farmers.
• Insurance Payouts:
  • ₹1.7 lakh crore disbursed as insurance payouts in the past 8 years.
• Penalties on Insurers:
  • 12% annual penalty imposed on insurers for delays in disbursing claims.

Fertiliser Subsidy Extension

• Subsidy for Di-Ammonium Phosphate (DAP):
  • Approved a one-time subsidy of ₹3,850 crore to extend fertiliser affordability.
  • Retail price of DAP fixed at ₹1,350 per 50 kg bag, with the extra burden borne by the Central government.
• One-Time Special Package:
  • Subsidy of ₹3,500 per tonne on DAP extended beyond December 31, 2024, effective from January 1, 2025.

PRADHAN MANTRI FASAL BIMA YOJANA (PMFBY)

• Overview: Launched in 2016, PMFBY is administered by the Ministry of Agriculture and Farmers Welfare, replacing NAIS and MNAIS.
• Eligibility: Farmers, sharecroppers, and tenant farmers growing notified crops in notified areas are eligible.
• Objectives:
  • Provide insurance coverage and financial support to farmers against crop failures due to natural calamities, pests, and diseases.
  • Stabilize farmers’ income to ensure their continuance in farming.
  • Encourage farmers to adopt innovative and modern agricultural practices.
  • Ensure the flow of credit to the agriculture sector.
• Premium Rates:
  • 2% for Kharif crops
  • 5% for Rabi crops
  • 5% for annual commercial and horticultural crops
• Use of Technology:
  • Crop Insurance App for easy enrollment and reporting of crop loss
  • Satellite imagery, remote-sensing technology, drones, artificial intelligence, and machine learning to assess crop losses
  • PMFBY Portal for integration of land records
• Recent Changes:
  • Made optional for all farmers in 2020
  • Centre’s premium subsidy limited to 30% for unirrigated areas and 25% for irrigated ones

RESTRUCTURED WEATHER-BASED CROP INSURANCE SCHEME (RWBCIS)

• Introduced in 2016 by the Government of India
• Aims to protect farmers from financial losses due to unfavorable weather conditions

• Key Features:
  • Covers various weather-related factors: rainfall, temperature, wind, and humidity
  • Offers coverage for food crops, oilseeds, and commercial/horticultural crops
  • Provides comprehensive insurance protection against perils like drought, flood, cyclone, and hailstorm
• Eligibility:
  • All farmers, including sharecroppers and tenant farmers
  • Growing notified crops in notified areas