New Crop Insurance Scheme – Pradhan Mantri Fasal Bima Yojana

New Crop Insurance Scheme – Pradhan Mantri Fasal Bima Yojana The Union Cabinet chaired by the Prime Minister Shri Narendra Modi on January 13, 2016 approved a New Crop Insurance Scheme aimed at providing maximum insurance for farmers at minimum premium.  The new scheme Pradhan Mantri Fasal Bima Yojana will be rolled out from the kharif season in June this year. It will replace the existing two schemes National Agriculture Insurance Scheme as well as modified National Agriculture Insurance Scheme.  Under the new Crop Insurance Scheme the farmers premium would be 2% for kharif foodgrains and oilseeds crops and 1.5% for rabi foodgrains and oilseeds crops. For horticulture and cotton crops the premium has been fixed at upto 5% for both khairf and rabi seasons.          There is no upper limit on Government subsidy. Even if balance premium is 90%, it will be borne by the Government. Earlier, there was a provision of capping the premium rate which resulted in low claims being paid to farmers. The New Scheme aims to enhance insurance coverage of crops up to 50% of the total crop areas from the existing level of about 23% over the next 2-3 years. It also provides for change in criteria to determine crop losses by providing local level assessment for calamities like hailstorm etc.  Under the new scheme simple technology through phone and remote censors would be used for quick estimation and early settlement of claims. Crop Insurance portal will be used extensively to ensure better coordination and transparency. The Government's liability on premium subsidy will be shared by the Central and State Governments on 50-50 basis.  The Government will substantially increase budget for crop insurance from Rs. 2883 crores in 2015-16 to Rs. 7750 crore in 2018-19. The New Crop Insurance Scheme will be implemented by private insurance companies along with the Agricultural Insurance Companies of India Ltd..