CROP INSURANCE -
ECONOMY
NEWS: The Union Cabinet
has approved the continuation of Pradhan Mantri Fasal Bima Yojana and
Restructured Weather Based Crop Insurance Scheme till 2025-26.
WHAT’S IN THE NEWS?
About
- The Cabinet approved setting up of the Fund for
Innovation and Technology (FIAT) for technology improvements in
insurance schemes.
- Key
initiatives include Yield Estimation System using Technology (YES-TECH),
which uses remote sensing for crop yield estimates.
- Weather
Information and Network Data System (WINDS) for augmenting weather data
through automatic weather stations.
About Pradhan Mantri
Fasal Bima Yojana
- Launch: In 2016 by the Ministry of
Agriculture & Farmers welfare.
- Objectives: It is a crop insurance scheme that
provides financial support to farmers in case of crop failure or damage
due to natural calamities, pests, or diseases.
- to
stabilize the income of farmers to ensure their continuance in farming;
- to
encourage farmers to adopt innovative and modern agricultural practices;
- to
ensure flow of credit to the agriculture sector.
- Coverage: All farmers including sharecroppers and
tenant farmers growing the notified crops in the notified areas are
eligible for coverage.
- Coverage of Crops: Food crops (Cereals, Millets &
Pulses), Oilseeds and Annual Commercial / Horticultural crops.
- Share between Centre and State: As
the States have a major role in implementation of the scheme the premium
subsidy is shared by the Central and State Government on a
50 : 50 basis and for North-Eastern States sharing
pattern has been made 90 : 10.
About Restructured
Weather Based Crop Insurance Scheme (RWBCIS)
- It was launched in 2016 to mitigate the hardship
of the insured farmers against the likelihood of financial loss on account
of anticipated crop loss resulting from adverse weather
conditions.
- While
PMFBY is based on yield, RWBCIS uses weather parameters as
“proxy‟ for crop yields in compensating the cultivators for
deemed crop losses.
- All
standard Claims are processed and paid within 45 days from the
end of the risk period.
Agri Credit in India
- Sources of Agricultural Credit: Public
sector banks (like the State Bank of India), regional rural banks (RRBs),
cooperatives, and NABARD (National Bank for Agriculture and Rural
Development) provide most formal agricultural credit.
- Types of Agricultural Credit:
- Short-term
Credit: Used for financing working capital needs like seeds,
fertilizers, and pesticides.
- Medium
and Long-term Credit: Used for purchasing equipment, irrigation systems, and
land development.
- Challenges:
- Low
credit penetration in rural areas.
- Dependency
on informal credit sources with high interest rates.
- Issues
with loan recovery and defaults.
Source: https://pib.gov.in/PressReleseDetail.aspx?PRID=2089410®=3&lang=1