New Delhi: In a major policy outreach for the farmers, the government on Wednesday approved a new Rs 8,800 crore crop insurance scheme under which the premium for farmers has been kept at a maximum of 2% for food grains and oilseeds and up to 5% for horticulture/cotton crops. As the country faced two consecutive droughts in the year of 2014 and 2015, the Pradhan Mantri Fasal Bima Yojana (PMFBY) will bring relief to the farmers. It will replace two existing schemes, National Agricultural Insurance Scheme as well as Modified National Agricultural Insurance Scheme (MNAIS), which have had some inherent flaws.
Under PMFBY, the farmers premium would be 1.5 percent for the rabi food grains and oilseeds crops, while 2 percent for kharif food grains and oilseeds crops. For horticutural and cotton crops it has been fixed at up to 5 percent for both the seasons. It will also increase the insurance coverage to 50 percent of the total crop area of 194.40 million hectare from the existing level of about 25-27 per cent crop area. The expenditure is expected to be around Rs 9,500 crore. The scheme will be rolled out from the coming kharif season beginning June