The premium to be paid by farmers is fixed at 1.5% of the security deposit for spring crops and 2% for fall crops, while it is 5% for cash crops under the PMFBY.The premium to be paid by farmers is fixed at 1.5% of the security deposit for spring crops and 2% for fall crops, while it is 5% for cash crops under the PMFBY.

By Prabhudata Mishra

With the aim of rolling out the reformed Pradhan Mantri Vasal Bima Yojana (PMFBY) project from fall 2022, the government has formed a working group comprising officials from the center, major crop-producing states and chief executives of public sector insurers to propose “sustainable, financial and operational models.” The move comes After many states withdrew from the scheme, thwarting the goal of protecting farmers’ income.

“With a view to achieving sustainable underwriting capabilities for insurance companies and rational premium pricing to reduce the support burden on the government, the working group is expected to address the demand for an alternative model,” an official source said. The group will submit its report within six months.

Recently, the Center identified distinct market stiffness, lack of adequate tendering participation, and inadequate insurance capacity of insurance companies as major issues that negatively affected PMFBY during the implementation of the plan.

The premium to be paid by farmers is fixed at 1.5% of the security deposit for spring crops and 2% for fall crops, while it is 5% for cash crops under the PMFBY. The balance premium is divided equally between the center and the states. Many countries demanded that their share of the subsidy be set at 30%, while others demanded that the center bear the entire subsidy.

“The working group will find out the reasons for the high premium rates and propose a mechanism to justify them including the option to create a risk pool,” said a source at the Department of Agriculture, adding that the role of state governments will have to be defined as they are the implementing agencies. .

Already, Gujarat, Andhra Pradesh, Telangana, Jharkhand, West Bengal and Bihar have exited the scheme, citing the cost of the subsidy to be incurred. While Punjab has never implemented a crop insurance scheme, Bihar, West Bengal and Andhra Pradesh have their schemes under which farmers pay no premium but receive a fixed amount of compensation in case of crop failure.

According to provisional data for 19 states (excluding Karnataka), there is a 10% drop in farmers’ registration under crop insurance during fall 2021 from Rs 1.68 crore last season.

Karnataka is not included because this year’s fall data for the state has not yet been uploaded to the central portal. Among the major producing states like Chhattisgarh, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Tamil Nadu and Uttar Pradesh, the drop in enrollment is in the range of 2-75%.

“It is certainly a concern because less than 12% of the 14.6 crores of land-owning farmers are covered by crop insurance during the Khareef period despite the fact that 52% of the country’s farmland does not have guaranteed irrigation facilities and depends on the monsoons. No guarantee will be given to any It would also be a major setback for the government’s goal of doubling farmers’ income, said a senior executive of an agricultural technology company involved in injecting technology into the plan.

The executive added that it would be good if the working group included some of the mandates that had left the Popular Mobilization Forces.

The newly formed group, headed by PMFBY CEO, will have Principal Trustees (Agriculture) in Maharashtra, Madhya Pradesh, Rajasthan, Gujarat, Assam, Tamil Nadu, Uttar Pradesh and Odisha as members.

Other issues to be considered by the group also include a detailed study of the feasibility of adopting appropriate technology-based approaches for early settlement of claims by modifying the traditional methodology of Crop Cutting Experiments (CCEs) for loss estimation.

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