The union cabinet on Wednesday approved the crop insurance scheme Pradhan Mantri Fasal Bima Yojana (PMFBY) to boost the farming sector and ensure farmers' welfare.
"The new Crop Insurance Scheme is in line with One Nation - One Scheme theme. It incorporates the best features of all previous schemes and at the same time, all previous shortcomings/weaknesses have been removed," said a ministry of agriculture statement.
Under PMFBY, the farmers are required to pay a uniform premium of two percent for all Kharif crops and 1.5 percent for all Rabi crops while it is five percent for annual commercial and horticultural crops.
"The premium rates to be paid by farmers are very low and balance premium will be paid by the government to provide full insured amount to the farmers against crop loss on account of natural calamities," the statement said.
With no upper cap on government subsidy, even if the balance premium is 90 percent, the government will bear it.
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The earlier practice of capping the premium rate has been done away with as it resulted in low claims being paid to farmers, the statement said.
"This capping (premium rate) has now been removed and farmers will get claim against full sum insured without any reduction," the statement added.
To enable faster claims payment, the government intends to encourage use of technology and smartphones to capture and upload data on crop harvesting and also deploy remote sensing to reduce crop cutting experiments.
