Restructured Weather Based Crop Insurance Scheme

Relevance: Prelims/Mains: G.S paper III: Economy

Why in news?

The Union Cabinet, chaired by the Prime Minister, Shri Narendra Modi has approved revamping of “Pradhan Mantri Fasal Bima Yojana (PMFBY)” and “Restructured Weather Based Crop Insurance Scheme (RWBCIS)” to address the existing challenges in implementation of Crop Insurance Schemes.

Key highlights:

Allocation of business to Insurance Companies to be done for three years (Both PMFBY/RWBCIS).
Option shall be given to States/UTs to choose Scale of Finance or district level Value of Notional Average Yield (NAY) i.e. Minimum Support Price (MSP) as Sum Insured for any district crop combination (Both PMFBY/RWBCIS).
Central Subsidy under PMFBY/RWBCIS to be limited for premium rates upto 30% for unirrigated areas/crops and 25% for irrigated areas/crops. Districts having 50% or more irrigated area will be considered as irrigated area/district (Both PMFBY/RWBCIS).
Enrolment under the Scheme to be made voluntary for all farmers (Both PMFBY/RWBCIS).
Central Share in Premium Subsidy to be increased to 90% for North Eastern States from the existing sharing pattern of 50:50 (Both PMFBY/RWBCIS).
Provisioning of at least 3% of the total allocation for the Scheme to be made by Government of India and Implementing State Governments for administrative expenses. This shall be subject to an upper cap fixed by DAC&FW for each State (Both PMFBY/RWBCIS).

Benefits:

With these changes it is expected that farmers would be able to manage risk in agriculture production in a better way and will succeed in Stabilizing the farm income.
Further, it will increase coverage in north eastern region enabling farmers of NER to manage their agricultural risk in a better way.
These changes will also enable quick and accurate yield estimation leading to faster claims settlement.
These changes are proposed to be implemented from Kharif’ 2020 Season throughout the Country.

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