The Union Agriculture Ministry has written to the States, prodding them to extend insurance cover offered under the Prime Minister’s Fasal Bima Yojana (PMFBY) to a larger number of crops this year.

“We have sent letters to all the State agriculture departments proposing that they increase the number of crops notified for insurance and the area covered. We want to create some pressure so that coverage increases and we reach 40 per cent of cultivated area this year from the present 30 per cent,” Ashok Dalwai, Additional Secretary, Agriculture Ministry, told BusinessLine .

Although the PMFBY provides for insurance coverage for all kharif, rabi and commercial crops, only those crops get covered that are notified by the States. “Many States exclude crops such as sugarcane, tobacco and some other high-value commodities to keep their subsidy burden low, as they have to shell out half of it. We pointed out to the States that increased coverage would ultimately benefit their own farmers. When the Centre is willing to increase its allocation, so should the States,” another official pointed out.

The PMFBY, which replaced the older National Agricultural Insurance Scheme (NAIS) and the modified NAIS last year, has already increased insurance coverage to 30 per cent of the crop area compared to about 22 per cent under the older scheme in the previous year, according to the Agriculture Ministry. The target is to expand coverage to 50 per cent by next year.

The scheme seeks to provide comprehensive insurance to farmers against the vagaries of nature at very low premia — of 2 per cent of the insured value for kharif crop and 1.5 per cent for the rabi season. For commercial crops and floriculture, the premium is 5 per cent. The rest of the premium charged by accredited insurance companies is shared by the Centre and States. The average insured amount under PMFBY has also increased to ₹1,41,000, compared to ₹63,000 under the older scheme because of the provision that the amount insured can’t be lower than the scale of finance to be determined by the district technical committee, the official added.

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