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Crop Insurance Premium Discussed at Meeting Chaired by PM Modi

PM Narendra Modi discussed with some ministerial colleagues the issue of crop insurance premium, which has been a sticking point in the scheme.

Published: 06th January 2016 09:49 PM  |   Last Updated: 06th January 2016 09:49 PM   |  A+A-

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Only PM Modi can resolve issue, says CM Siddaramaiah. | EPS

By PTI

NEW DELHI: Prime Minister Narendra Modi today discussed with some ministerial colleagues the issue of crop insurance premium, which has been a sticking point in the scheme.

The proposal on the new crop insurance scheme, moved by the Agriculture Ministry, was once discussed in a Cabinet meeting last year, but the decision was deferred in the wake of differences over the premium rate.

The ministry, in its cabinet note, has proposed an average premium of upto 2.5 per cent for foodgrain and oilseeds crops and 5 per cent for horticulture crops. Some sections, however, wanted a uniform premium of 1-1.5 per cent for all crops.

In the meeting this evening, Agriculture Minister Radha Mohan Singh is understood to have given a presentation on the new crop insurance scheme and its benefits, sources said.    

The premium issue was discussed, they added.

According to the sources, the meeting was informed that the Centre would incur an expenditure of Rs 8,000 crore annually if a premium rate for farmers was fixed at 2.5 to 5 per cent depending on the risky crops and if 50 per cent of the total crop area of 194 million hectare was insured.

It was also informed that fixing a uniform premium rate of 1.5 per cent for all crops for 100 per cent coverage would increase the Centre's financial burden to Rs 11,000 crore, which the Finance Ministry officials said was a major concern at present.

In the existing Modified National Agricultural Insurance Scheme (MNAIS), the average premium rate for farmers has been kept at 5.5 per cent, though the premium rate for high risky crops is as high as 40 per cent.

Last year, only 27 per cent of the crop area was insured which cost Rs 3,150 crore to the national exchequer.

Besides lower premium rate, the proposed crop insurance aims to settle insurance claims faster by assessing the crop damage using modern technologies like remote sensor.

It was informed in the meeting that the Agriculture Ministry has already launched a portal on crop insurance and a mobile app as part of the digital India campaign, sources added.

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