APP Users: If unable to download, please re-install our APP.
Only logged in User can create notes
Only logged in User can create notes

General Studies 2 >> Governance

audio may take few seconds to load

CROP INSURANCE SCHEME

CROP INSURANCE SCHEME

 
 
1. Context
 
The Union Cabinet on January 1, 2025, approved the continuation of two crop insurance schemes — the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather-Based Crop Insurance Scheme (RWBCIS) until 2025-26. It also approved the creation of the Fund for Innovation and Technology (FIAT) with a corpus of Rs.824.77 crore
 
2. Pradhan Mantri Fasal Bima Yojana (PMFBY)
 
  • 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) 
 
  • The FIAT initiative will be utilized to support technological advancements under programs such as the Yield Estimation System using Technology (YES-TECH) and Weather Information and Network Data Systems (WINDS), as well as for conducting research and development studies.

  • YES-TECH employs Remote Sensing Technology to estimate crop yields, with at least 30% reliance on technology-driven yield estimates. The program is currently being implemented in nine states: Andhra Pradesh, Assam, Haryana, Uttar Pradesh, Madhya Pradesh, Maharashtra, Odisha, Tamil Nadu, and Karnataka.

  • WINDS aims to establish Automatic Weather Stations (AWS) at the block level and Automatic Rain Gauges (ARGs) at the Panchayat level. The initiative seeks to achieve a fivefold increase in the existing network density to generate hyper-local weather data. As part of this program, the Central and State Governments are only required to cover data rental expenses

 
 
3. Di-ammonium phosphate (DAP)
 
  • 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.

  • 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.

  • 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).

  • 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.

  • 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

 
4. Way Forward
 
Enhance farmer awareness campaigns to educate them about the benefits of crop insurance schemes like PMFBY and RWBCIS. Special attention should be given to small and marginal farmers to increase their participation
Expand the use of technologies like YES-TECH and WINDS for accurate yield estimation, weather monitoring, and hyper-local data collection. This will help improve the transparency and efficiency of the claim settlement process
 
 
For Prelims: Di-ammonium phosphate (DAP), Automatic Weather Stations (AWS)
 
For Mains: GS II - Governance
 
Source: Indianexpress

Share to Social