Centre May Revise Agriculture Income Insurance Scheme

The state governments, by putting up several objections to the method of implementation of the new farm income insurance scheme, has placed the Centre in a fix. The Centre has assured the states that it would to revise the new scheme on basis the experiences to be gained on its implementation at pilot stage for wheat and paddy in 18 select districts in 16 states from the current rabi season.

The Centre will also take into account the feedback given by the state agriculture secretaries and concerned district collectors at the meeting chaired by agriculture minister Rajnath Singh here on Thursday.

At Thursdays meeting the states raised objection to consideration of average income for past seven years on basis of crop yields as a common base for determination of premium and the insurance cover. Some states were in favour of reducing the average period contending that agriculture prices are increasing every year. Other states suggested that norms for yield estimate, premium and insurance cover should not be the same across the country. There should be different yardsticks for irrigated area, rainfed area, flood-prone area and areas affected by recurring drought. Norms should also be different for areas under intensive cultivation.

Maharashtra officials, however, did not agree to the Centres proposal for computing farm income by taking the declared MSPs into consideration. They said at places the farmers get returns in certain crops which are much higher than MSPs.

Several states objected to the idea of taking a development block as a unit in the scheme. They demanded the unit for consideration should be a village or preferably a cluster of villages.

The new scheme was conceived by the Centre with a view to render a minimum guaranteed income to farmers. This minimum guaranteed income would be determined by using the average yield of crops for the last seven years and MSPs. If the actual income falls short of the guaranteed income, the farmer would be eligible for a compensation to the extent of indemnity from the Agricultural Insurance Company, which would operate the scheme. A premium subsidy of 75 percent is proposed to be given to small and marginal farmers and in case of other farmers this premium subsidy is 50 percent.

However, in the pilot projected being implement from the current rabi season, the entire subsidy will be borne by the Centre.