Agri Business

Crop Insurance: Gujarat exits PMFBY, launches State-funded scheme for Kharif 2020

Our Bureau Ahmedabad | Updated on August 10, 2020 Published on August 10, 2020

Cites exorbitant premium quotes from Insurance companies for this year

Gujarat is the latest State to exit the Pradhan Mantri Fasal Bima Yojana (PMFBY) - an ambitious crop insurance scheme citing exorbitantly high premium cost to the State.

State Chief Minister Vijay Rupani on Monday launched an alternate State-funded scheme - Mukhya Mantri Kisan Sahay Yojana covering all farmers under a crop insurance for the current kharif season.

“Due to exorbitant cost of premium, which works out at around ₹4,500 crore as per the tenders, we have decided to cancel the tenders for PMFBY. Though it is a good scheme for the farmers, and Gujarat has remained its part in the past and will be so in future too, but for the current year at least we are not going with PMFBY scheme considering excess burden on the State exchequer,” Rupani said during a media briefing on Monday.

Last year, Reliance General Insurance Company, Universal Sompo, Bharti Axa and Agriculture Insurance Company of India were appointed for different clusters in the State.

Every year tenders are floated for insurance companies to ask for premiums to provide crop insurance coverage to farmers. This year, the tenders floated by Gujarat government saw insurance companies asking ₹5,700 crore in premium, Rupani said.

However, he added that the State government has rolled out a simplified crop insurance scheme covering all the farmers in the State.

“We are announcing Mukhya Mantri Kisan Sahay Yojana for current year’s Kharif season. There will be zero premium payable by farmers. It will not require any registration from the farmers side. All climatic extremities will be considered including drought, floods or even damage due to unseasonal rains. Under the PMFBY, about 15-17 lakh farmers were covered, whereas in the State’s scheme, all 56 lakh farmers will get automatically covered under the scheme,” he said.

For the kharif 2020 season, any farmer with a land ceiling of upto four hectares will be eligible to claim insurance relief. The State will provide ₹20,000 per hectare relief for crop damages in the range of 33 per cent to 60 per cent, while ₹25,000 for damages in excess to 60 per cent. The relief amount will be directly credited to the farmers’ accounts through direct benefit transfer (DBT).

“Mostly during the Kharif season, farmers have to bear the adversities of climatic uncertainty. Therefore, this scheme is applicable for only the crops sown during kharif season (i.e. sown till July),” Rupani added.

The State government has laid down guidelines to qualify for a claim. Any taluka receiving rains less than 10 inches or 250 milimeters, will be pronounced as drought-hit and subsequently, farmers of the area will qualify for the claims. Similarly, rainfall in excess to 25 inches within 48 hours would mean excess rains - floods as per the guidelines. And any taluka getting rains of over 50 mm in 48 hours during the unseasonal time of October 15 to November 15, it would be declared as cloud burst.

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Published on August 10, 2020
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