In Stinging Message To Centre, Nitish Kumar Crafts New Scheme For Farmers

The Bihar government suggested that the new scheme --- 'Bihar Rajya Fasal Sahayata Yojna' --- will have a wider coverage than the 'Pradhan Mantri Fasal Bima Yojana'.


Bihar Chief Minister Nitish Kumar has been critical of centre's crop insurance scheme (PTI)



  1. Nitish Kumar's scheme entitles farmers to compensation without premium
  2. It will cover all categories of farmers in event of crop failure
  3. The scheme will kick in from the current Kharif season
Smarting over a series of "let-downs" from Prime Minister Narendra Modi since he rejoined the BJP-led coalition last year - particularly the vastly pared down flood relief fund - Bihar Chief Minister Nitish Kumar has got his own back. He has rejected a crop insurance scheme pitched by the centre as a game-changer and instead, come up with his own scheme, which entitles farmers to compensation without having to pay any premium.

The Bihar government also suggested that the new scheme --- 'Bihar Rajya Fasal Sahayata Yojna' --- will have a wider coverage than the 'Pradhan Mantri Fasal Bima Yojana' that covers farmers who have taken loans from national and cooperative banks or financial institutions. Interestingly, Nitish Kumar's Agriculture Minister Prem Kumar, who is from the BJP, has defended the decision.

According to the central scheme, both the state and the centre bear 49 per cent of the cost of premium. Target beneficiaries have to pay the remaining two per cent. The centre fixes the amount which a state has to pay to insurance companies under this scheme.

In the 2016 Kharif season, while Bihar paid Rs. 495 crores as its share, farmers received just Rs. 221 crores as compensation for crop damage, said Bihar's Principal Secretary (Cooperatives) Atul Prasad.

While the centre's scheme marginally benefitted farmers who had taken loans, the new scheme covers all categories of farmers, he said.

The scheme kicks in from the current Kharif season.

Nitish Kumar has been sharply critical of the central scheme, saying the real beneficiaries aren't farmers but insurance companies. But when he had voiced the critique, he was still part of an alliance with the RJD and Congress. He dumped the alliance in July last year and revived his partnership with the BJP.

According to the state's version of the crop insurance scheme, farmers who suffer crop losses of up to 20 per cent of the threshold yield will get Rs. 7,500 per hectare subject to a maximum compensation amount of Rs. 15,000. The threshold yield is calculated on the basis of the average yield for the last seven years.

For crop losses beyond 20 per cent of the threshold yield, the compensation has been fixed at Rs. 10,000 per hectare, with a cap of Rs. 20,000. Effectively, the scheme aims at benefitting small farmers who make up a sizable chunk of the state's agrarian population.

The move comes against the backdrop of a back and forth between Mr Kumar's party Janata Dal United and the BJP over who --- Mr Kumar or Prime Minister Narendra Modi --- will be the face of the BJP-led National Democratic Alliance (NDA) in Bihar for next year's general elections. It's seen as a pitch for a greater share in the number of seats by the JD(U).

Mr Kumar, sources in the JD(U) say, is upset with the centre allocating Rs.1,200 crores against Rs. 7,600 crores he had asked as compensation for the floods that ravaged Bihar last year, killing over 500 people.

Slighted by the rejection of its flood relief claim, the Bihar government feels the centre has not measured up to the scale of the tragedy. It now seeks to project its crop insurance scheme as a model alternative which could prod more states to opt out of the central scheme.

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