Agri Business

Unconvinced over benefits, Madhya Pradesh may quit PM crop insurance scheme

TV Jayan New Delhi | Updated on June 07, 2020

Madhya Pradesh Chief Minister Shivraj Singh Chouhan   -  THE HINDU

State considering new trust for farmers; exit may threaten existence of PMFBY

Will Madhya Pradesh be the first BJP-ruled State to come out of the Prime Minister Narendra Modi’s pet crop insurance scheme? According to highly-placed sources, the Shivraj Singh Chouhan government is toying with the idea of exiting the Pradhan Mantri Fasal Bima Yojana (PMFBY) as it feels the farmers in the State are not benefiting from it.

If it does, it could be a major embarrassment for the Modi government, which has portrayed PMFBY as a great success story, and could also threaten the very existence of the scheme. For, M.P. accounts for nearly one-fourth of the total area insured under the PMFBY, as well as the total premium collected under the crop insurance scheme. In 2018-19, for instance, nearly 130 lakh hectares (kharif and rabi combined) of crops were insured under PMFBY in the State, against 519 lakh hectares nationwide.

Similarly, the total premium that insurance firms received for PMFBY in the State in 2018-19 was ₹5,588 crore, out of the total pan-India premium of ₹29,106 crore. According to the data available from Parliament questions, in 2018-19, the M.P. government spent ₹2,322 crore on the scheme, apart from ₹945 crore paid by the farmers. The Centre also provided a matching premium subsidy of nearly ₹2,322 crore for the year.

The sources said the State government is planning to set up a trust which would give crop insurance cover to all its 1.02 crore farmers at a nominal rate. The proposed scheme is awaiting approval. “We would like to offer a better insurance scheme to out farmers. There are more than 1 crore farmers in the country, but only 35 lakh farmers have enrolled for the PMFBY scheme,” one of the sources said.

State officials think they can provide better insurance cover to the farmers using the same amount of money they pay towards premium subsidy, or even less.

“We feel that if a trust is formed for the purpose of giving insurance cover to the farmers, everybody is going to benefit from it. Firstly, we would be able to provide universal cover to all farmers. Secondly, we can mobilise CSR funds for the purpose, bringing down the money spent as State premium subsidy,” said a source.

The final decision would rest with the Chief Minister.

Published on June 07, 2020

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor