What is the Prime Minister’s Crop Insurance Plan?
- Taking cognizance of the problems of farmers, the Government of India started an ambitious scheme of Prime Minister’s Crop Insurance Scheme in 2016, which aimed to provide help to the farmers in the event of low yields or loss of yield.
- PMFBY is a replacement plan instead of the National Agricultural Insurance Scheme (NAIS) and the Revised National Agriculture Insurance Scheme (MNAIS) and hence it has been exempted from the service tax.
- Under Prime Minister’s Crop Insurance Scheme, premiums are paid to the insurers on fixed rate by the farmers, but for this, the farmers have to register their land first, in return the insurance companies compensate them.
- Farmers are paid a similar premium of 1.5% for all kharif crops and 1.5% for all Rabi crops. In case of annual commercial and horticultural crops, the premium will be only 5%. The rates of premium paid by the farmers are very low and the remaining premium will be paid by the government so that the full insured amount is provided to the farmers for crop loss in any kind of natural calamities.
- Not only in standing crop but in addition to crop pre-sowing and harvesting, the risks have also been included. Under this scheme, the loss of local disasters will also be assessed.
Main purpose of the plan
- Providing insurance coverage and financial assistance to farmers in the event of failure of any of the notified crops as a result of natural disasters, pests and diseases.
- To ensure continuous process of farmers in agriculture, to provide sustainability to their income.
- Encourage the farmers to adopt innovation and modern practices in agriculture.
- Ensure the flow of credit in the agricultural sector.