Going beyond the conventional methods of compensation and crop cover, the new insurance scheme provides for compensation for even loss of seed plants and post-harvest damage.
The NDA government's flagship crop insurance scheme - the Pradhan Mantri Fasal Beema Yojna - which is aimed to be a major policy outreach towards farmers -- got the green signal from the Union cabinet today.
The most crucial element of the scheme is that it will bring down the rate of premium to be paid by farmers to a maximum of 2% of the sum insured. The rest will be paid by the state and the central government.
Currently, farmers have to pay a premium ranging from 4 to 15 per cent to insure crops.
Addressing the press, home minister Rajnath Singh said, "The scheme will create a security shield for farmers and will provide financial relief to them."
Crop insurance schemes have been around since 2008, but they have registered a mere 23% cover. The aim is to increase it to 50% cover in the next few years.
"Farmers didn't accept the scheme because of deficiencies. The government has now removed those," Mr Singh added.
"So far, a government will only provide relief, but now the scheme will compensate for the losses," Agriculture Minister Radhamohan Singh said.
The new scheme proposes a differential premium method, under which a farmer will pay 2% of the sum insured as premium for kharif crops and 1.5% for rabi crops.
The scheme entails immediate payment of 25% of the due compensation, the money will go directly to bank accounts of the farmers.
Going beyond the conventional methods of compensation and crop cover, the scheme provides for compensation for even loss of seed plants and post-harvest damage. It will also provide assessment for localised calamities -- including hailstorms, unseasonal rains, landslides and inundation - addressing a long-standing demand of farmers.
Instead of relying on yield data, which is often delayed, to settle claims, it will use smartphones, remote-sensing data and even drones to assess crop damage.
Urban development and poverty alleviation minister M Venkaiah Naidu told NDTV, "Because of area-based assessments -- in which the results of crop cutting experiments over a small area are used to pay claims for a larger area -- farm-level assessment is not done at all. Once farm-level assessments begin, claims for losses suffered in localised calamities will get paid."