Premium Subsidy on Crop Insurance

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19 March 2021, New Delhi: To address the issue of high premium rates for few crops/areas due to adverse selection, inconsistencies in the cultivation of crops as per the suitability of the climate, inconsistencies in collection of yield data etc. under Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS),  the requisite central share of premium subsidy (i.e. 90 : 10 for North Eastern States and 50 : 50 for remaining States) will be provide for areas/crops having gross premium rate upto 25% for irrigated areas/crops and upto 30% for un-irrigated areas/crops from Kharif 2020 season. Though this may affect the State Governments liabilities initially, but will help/encourage them to examine the reasons/causes of such high premium rates and make suitable corrective measures in collection of yield data, issue weather advisory, advise crop diversification to the farmers etc.  More freedom has been given to the States to choose the risk including single peril based on prevailing climate conditions etc. to cover more and more crops under the scheme by the State Governments.  

Further, National Rainfed Area Authority (NRAA) has also been requested to Study Operational issues in implementation of PMFBY and to recommend effective implementation strategies for most vulnerable districts. 

Based on the requests/representations received from various quarters including farmer organizations, States etc. by the Government and to give choice to the farmers to assess their risk profile and accordingly decide on the issue of crop insurance, these schemes have been made voluntary for farmers w.e.f. Kharif 2020 season. 

This information was given in a written reply by the Union Minister of Agriculture and Farmers Welfare Mr. Narendra Singh Tomar in Rajya Sabha today.

Also Read: 89.5 lakh tonnes of mustard seed to be produced in India during rabi season of 2020-21: COOIT

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