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India: Crop Insurance scheme to be revamped.

June 13, 2014

The Agriculture Ministry will revamp the crop insurance scheme with focus on increasing crop-based income for farmers rather than insuring them against crop losses.

This means that the government has decided to immediately stop the current crop insurance scheme – the Modified National Agricultural Insurance Scheme, launched only last year. According to official sources, this existing scheme requires the government, farmers and the private companies to pay the money for insurance but the system is too complicated and difficult for the farmers to get an income in case of crop failure, reported Business Standard.

The major issue with the scheme is that farmers get the insurance money if there is a total crop loss. If there is a crop loss for a single farmer getting the money is not feasible most of the time, officials said.”

The existing scheme does not treat an individual farmer as a unit when providing insurance compensation. It treats a village or a group of villages as a unit in the compensation formula and it invariably tends to benefit big and medium farmers.

Officials say that the revamp will focus on simplifying the procedure for farmers to receive the money in the event of the crop failure of a single farmer.  All farmers, including sharecroppers, tenant farmers, farmers enrolled in contract farming, groups of farmers serviced by fertilizer companies, pesticide firms, crop growers, and self help groups are expected  to be eligible for insurance cover. It will be also made available for food crops, oilseeds and annual commercial/ horticultural crops.

Agriculture Minister Radha Mohan Singh said that the change in the crop insurance plan will  take into account the average income of farmers in the last 5-7 years in devising a compensation scheme. The central government will bear the burden of the premium for insurance of average income, said Mr Singh adding: “Farmers will take interest in agriculture only when their investment is guaranteed.



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