Agri Business

Green push: Govt revamps crop cover scheme, prunes premium subsidy

Our Bureau New Delhi | Updated on February 19, 2020

Agriculture Minister Narendra Singh Tomar w

To plug loopholes, makes scheme voluntary for farmers

The government on Wednesday announced that it would reduce its share in premium subsidy for the flagship crop insurance scheme — PM Fasal Bima Yojana (PMFBY) — to 30 per cent and 25 per cent, respectively, for unirrigated and irrigated crops from the existing 50 per cent for major States, even as it made the crop protection cover voluntary for farmers.

On the other hand, the Central share in the premium subsidy would be increased to 90 per cent for the north-eastern States, said Agriculture Minister Narendra Singh Tomar, after a Cabinet meeting here.

The Minister said the Cabinet Committee on Economic Affairs, which also met on Wednesday, decided to allocate ₹6,865 crore to set up 10,000 farmer producer organisations (FPOs) over the next few years. A total budgetary provision of ₹4,496 crore will be made between 2019-20 and 2023-24 towards these FPOs, while another ₹2,369 crore will be set aside for three years from 2024-25 to help ensure their handholding and aggregation for five years, the Minister said. Tomar, together with Information and Broadcasting Minister Prakash Javadekar and Minister for Women and Child Development, was briefing the media about the Cabinet decisions.



Making changes

The government also decided to alter a few more provisions in both PMFBY and Restructured Weather-Based Crop Insurance Scheme (RWBCIS). “The PMFBY scheme is currently in the third year. Prime Minister Narendra Modi was of the opinion that the challenges in the implementation of the schemes need to be addressed before it completes three years,” Tomar said.

These changes would be implemented from next kharif season.

The government has also made it compulsory for the States to allow crop insurance firms to operate for three years. Currently, the tenders floated by the States are for one-year, two-year or three-year periods. Also, States defaulting on payment of premium subsidy will not be allowed to offer PMFBY the next crop year. The cut-off dates for invoking this provision would be March 31 for kharif and September 30 for rabi.

Similarly, crop cutting experiments (CCEs) will not be mandatory for crop estimation, which is used to determe claim payouts. “There is an increasing consensus among various stakeholders, including some States, to rely more on technology,” Tomar said. Only those areas where there is major deviation from normal ranges will be subjected to CCEs for assessing yield loss. Those areas falling in normal ranges will be assessed using weather and satellite indicators. Even in the case of CCEs, smart sampling techniques and optimisation of number of CCEs will be adopted, he said.

As far as FPOs are concerned, the implementation agencies would be Nabard, SFAC, and National Cooperative Development Corporation (NCDC). “We would like to ensure that there are at least two FPOs in each block in the country,” Tomar said. At least 1,500 FPOs would be in aspirational districts of the country. The government would also park a credit guarantee fund of ₹1,500 crore — ₹1,000 crore with Nabard and ₹500 crore with NCDC — for these FPOs.

Dairy processing

The government also decided to increase interest subvention for dairy farmers under the Dairy Processing and Infrastructure Development Fund to 2.5 per cent from the existing 2 per cent. This would help 95 lakh farmers, Javadekar said. Besides, the government would establish an additional milk chilling capacity of 140 lakh per day, create milk drying capacity of 210 tonnes per day, expand milk processing capacity to 126 lakh litres per day and create infrastructure for value-added dairy products for nearly 60 lakh litres of milk per day, he said.

Published on February 19, 2020

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