Fasal Bima Yojana: Andhra Pradesh Rejoined

News Highlights

Andhra Pradesh has rejoined the crop insurance scheme Pradhan Mantri Fasal Bima Yojana after having opted out in 2019-20.

Andhra Pradesh: Mentioned Reasons for opted-out

• The scheme should be voluntary
• States should be given options to choose risk
• The scheme should be universal, and the cut-off date for enrollment should be flexible state should be given the option to use their database of E-crop, an application used by the AP government to collect information about crops

Other five states opted-out

• The Union government is also reaching out to the five other states—Bihar, Jharkhand, Gujarat, Telangana and West Bengal—to bring them back on board to implement this crop insurance scheme
• These six states had implemented the PMFBY initially. 
• But they opted out at different times in the last four years for different reasons.

Pradhan Manthri Fasal Bima Yojana

• A flagship scheme of the Government of India, PMFBY insures farmers against all non-preventable natural risks from pre-sowing to post-harvest.
• Launched in the 2016 kharif season
• Objectives
  • To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests & 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 the flow of credit to the agriculture sector.
• Premium Payment
  • Farmers have to pay a maximum of 
    • 2 percent of the total premium of the insured amount for kharif crops
    • 1.5 percent for rabi food crops and oilseeds
    • 5 per cent for commercial / horticultural crops.
  • The balance premium is shared by the Union and state governments on a 50:50 basis and on a 90:10 basis in the case of northeastern states.
• Coverage of Crops
  • 1)Food crops (Cereals, Millets and Pulses)
  • 2) Oilseeds
  • 3) Annual Commercial / Annual Horticultural crops
• Risk Covered 
  • Yield Losses (standing crops, on a notified area basis)
    • Yield losses due to non-preventable risks, such as Natural Fire and Storm, Lightning, Cyclone, Hailstorm, Tempest, Typhoon, Tornado, and, hurricanes.
  • Prevention of Sowing: If the majority of insured farmers are unable to sow due to adverse weather conditions and have incurred costs for sowing.
  • Risks due to Flood, Inundation, and Landslide.
  • Drought, Dry spells, and Pests/ Diseases also will be covered
  • Post-harvest losses
  • Localized issues are also covered.

Revamped Pradhan Mantri Fasal Bima Yojana (PMFBY)

• Initially, the scheme was compulsory for loanee farmers; in 2020, the Centre revised it to make it optional for all farmers.
• Now states and UTs are free to extend additional subsidies over and above the normal subsidy from their budgets.
• In 2020, the Centre decided to restrict its premium subsidy to 30% for unirrigated areas and 25% for irrigated areas (from the existing unlimited). 
  • Earlier, there was no upper limit for the central subsidy.
• Insurance companies have to now spend 0.5% of the total premium collected on Information, Education And Communication (IEC) activities.

Content Source: Indian Express