CROP INSURANCE SCHEME
- The Pradhan Mantri Fasal Bima Yojana (PMFBY), introduced in 2016, replaced the earlier National Agricultural Insurance Scheme (NAIS) and the Modified National Agricultural Insurance Scheme (MNAIS). It operates under the principle of "One Nation, One Crop, One Premium." The scheme provides insurance coverage to all farmers, including sharecroppers and tenant farmers, cultivating "notified crops" in "notified areas."
- Initially, participation in the scheme was mandatory for loanee farmers. However, in February 2020, the government revised the policy to make it voluntary for all farmers.
- The primary aim of PMFBY is to stabilize farmers' incomes, ensuring their continued engagement in agriculture, promoting the adoption of modern agricultural techniques, and facilitating access to credit. It offers financial protection to farmers in case of crop failure caused by natural disasters, pests, or diseases.
- The premium rates for farmers under PMFBY are as follows: 2% of the sum insured or the actuarial rate (whichever is lower) for kharif foodgrain and oilseed crops; 1.5% for rabi foodgrain and oilseed crops; and 5% for horticultural crops.
- Initially, the gap between the actuarial premium rate and the farmer’s premium payment, referred to as the normal premium subsidy, was equally shared by the Centre and states. Additionally, states and Union Territories had the option to provide extra subsidies from their budgets.
- In February 2020, the central government capped its premium subsidy at 30% for unirrigated areas and 25% for irrigated areas. Prior to this, there was no upper limit on central subsidies.
- The revised guidelines of February 2020 also stipulated that if a state fails to pay its share of the premium subsidy within the specified timeline, it will be disqualified from implementing the scheme in the subsequent season.
- Unlike PMFBY, which is yield-based, the Restructured Weather-Based Crop Insurance Scheme (RWBCIS) uses weather parameters such as rainfall, wind, and temperature as indicators. However, the number of farmers enrolled under RWBCIS is comparatively low
Purpose of Fund for Innovation and Technology (FIAT)
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The central government has extended the special subsidy of ₹3,500 per tonne on di-ammonium phosphate (DAP), originally set to expire on December 31, for an additional year starting January 1, 2025.
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DAP contains 46% phosphorus, an essential nutrient required by crops during the early stages of root establishment and development. Farmers typically use it at the time of sowing, applying it alongside seeds.
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However, the availability of the traditionally used granular DAP, which is largely imported, has been inconsistent, with shortages and delays causing concern among farmers. This has prompted agro-scientists and policymakers to explore alternatives, such as nano DAP developed by the Indian Farmers Fertiliser Cooperative Ltd (IFFCO).
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Nano DAP, produced domestically, is available in liquid form, making it easier to handle and more cost-efficient compared to granular DAP. A 500 ml bottle of nano DAP, priced at ₹600, is sufficient to cover one acre of farmland.
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IFFCO introduced nano DAP in 2023, following the launch of nano urea in 2021. These innovations align with India’s broader goal of reducing dependence on imported fertilisers
For Prelims: Di-ammonium phosphate (DAP), Automatic Weather Stations (AWS)
For Mains: GS II - Governance
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