Lok Sabha Question No. 3108 (UNSTARRED), answered on 2017-03-21
Subject: Revamping Crop Insurance Scheme
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Dr. BHOLA SINGH, PARAYAMPARANBIL KUTTAPPAN BIJU

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA UNSTARRED QUESTION NO.3108

TO BE ANSWERED ON THE 21 ST   MARCH, 2017

## REVAMPING CROP INSURANCE SCHEME

3108.       DR. BHOLA SINGH: SHRI P.K. BIJU:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) whether  the  Government  proposes  to  revamp  the  old  crop  insurance  scheme  by reconciling the discrepancies under recently introduced new Pradhan Mantri Fasal Bima Yojana (PMFBY) to enable farmers to get maximum benefits, if so, the details thereof;
- (b) whether  any  deficiencies  have  been  found  in  the  existing  form  of  crop  insurance scheme, if so, the details thereof;
- (c) whether  the  Union  Government  has  sought  views  of  various  State  Governments  on revamping of the crop insurance scheme, if so, the response of the various State Governments thereto;
- (d) whether the amount of premium paid by farmers under PMFBY has been substantially reduced  and  also  the  cap  on  payment  on  insurance  has  been  withdrawn,  if  so,  the  details thereof; and
- (e) the steps taken by the Government to make the crop insurance scheme most beneficial/ fruitful for farmers?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंालय म राय मंी (SHRI  PARSHOTTAM  RUPALA)

(a) to (e): Pradhan  Mantri  Fasal  Bima  Yojana  (PMFBY)  and  Restructured  Weather  Based Crop Insurance Scheme (RWBCIS) have  only been recently launched from Kharif 2016 season after  thorough  review  of  the  shortcomings  of  erstwhile  schemes   in  consultation  with  various stakeholders  including  State  Governments.   Various  shortcomings  in  the  erstwhile  schemes namely high premium rates for farmers, cap on premium with resultant reduction in sum insured and claims  if  any,  poor  induction  of  technology,  delay  in  submission  of  yield  data  by  States/ Union Territories and resultant delay in settlement of claims etc. were sought to be overcome and revamped through the new schemes.   Further, to make the scheme more advantageous for  farmers,  many  innovative  solutions  have  been  incorporated  in  the  new  schemes.  The PMFBY provides comprehensive crop insurance from pre-sowing to post harvest losses against non-preventable  natural  risks  at extremely low maximum premium rate of 2% for  Kharif crops,

1.5% for Rabi Crop and 5% payable by farmers for annual commercial/horticultural crops, which premium rates are also applicable under RWBCIS.   The balance of actuarial/bidded premium is shared by the Central and State Government on 50 : 50 basis.    Further, not only has cap on premium which had earlier led to reduction in sum insured been removed under both schemes, but sum insured has been made equal to the Scale of Finance thereby providing maximum risk coverage to the farmers.  In an effort to provide more realistic assessment of losses, the unit area of insurance has been reduced from Tehsil/district level to village/village panchayat level for  major  crops  and  to  individual  farm  level  for  localised  risks  of  hailstorm,  landslide  and inundation.   While settlement of claims is done on the basis of yield loss assessment at the end of  season,  some  measure  of  immediate  relief  is  also  provided  to  insured  farmers  in  case  of adverse  seasonal  conditions  during  the  crop  season  due  to  which  expected  yield  during  the season is likely to be less than 50% of the Threshold Yield in the concerned insurance unit.

To  address  probability  of  delay  in  settlement  of  claims,  several  measures  have  been incorporated under PMFBY/RWBCIS namely, timelines have been stipulated for completion of every activity, be it submission of proposals by banks to insurance companies, assessment of yield  by  State  Government  agencies,  processing  and  settlement  of  claims  by  insurance companies,  the  last  to  be  done  within  three  weeks  of  receipt  of  yield  data  from  State.   To expedite the yield data submission, the Department has deployed CCE Agri App and made it mandatory  for  States  to  transmit  data  through  CCE  Agri  App/smartphones.    Further,  new remote sensing technology is also being experimented with to achieve more accurate yield loss assessment  for  purposes  of  accurate  claim  settlement.   Most  importantly,  the  National  Crop Insurance Portal has been launched to facilitate online flow of information and service delivery among stakeholders.

Regular  assessment  of  the  implementation  of  the  existing  crop  insurance  schemes  is being  undertaken  at  the  level  of  Central  Government  with  all  stakeholders  including  State Governments,  Financial  institutions  and  insurance  companies  and  as  this  is  the  first  year  of implementation of the scheme, several teething issues are being resolved on an ongoing basis.

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