Answer: 

Introduction:

Indian Agriculture is excessively dependent on monsoons. According to World Bank only 35 % of total area under cultivation in India was irrigated by 2010. Monsoon fluctuations and other natural calamities such as natural fires, typhoons, hail storms, etc have played havoc in Indian farmer’s lives. Even when there is bountiful production, the farmer has fallen victim to price fluctuations. Crop insurance plan assists in the stabilization of crop production and related income of the farmers.

Body:

Benefits of crop insurance are:

• Protection against crop failure: Crop insurance provides protection to farmers against losses caused by crop failure and thereby ensures stability in farm income.
• Yield protection: This provides for protection in case the production falls or decreases. They also provide protection against post-harvest losses.
• Revenue protection: It provides for protection in case of price fluctuations. Often, during a bumper harvest year the prices crash due to increased supply. Revenue protection offers the farmer a guaranteed ‘minimum assured income’.
• Reduce government expenditure: Crop insurance also reduces government expenditure incurred on relief measures extended to meet the havoc caused by natural calamities such as droughts and floods, locusts, plant diseases. It is a proactive response rather than reactive.
• More investment and innovation: By protecting the economic interest of the farmers against possible risk or loss, it accelerates adoption of new agricultural practices.

Thus, recognizing the need of insurance and archaic nature of NAIS (National Agriculture Insurance Scheme), the government introduced PMFBY (PM Fasal Bima Yojana) with an aim to bring 47% of farmers under this scheme within a year, replacing the earlier NIAS and MNIAS.

Salient features of PMFBY:

• Comprehensive coverage: It includes Rabi, Kharif crops and Horticulture crops. Apart from hailstorms, unseasonal rains, landslides and inundation like calamities, this scheme will also include post-harvest losses.
• Uniform premium rate of 2% for Kharif crops, 1.5% for Rabi crops and 5% for commercial and horticulture crops. Premium paid by farmers is very low, the Government pays the remaining premium.
• Aided by technology: Remote sensing, smart phones and drones are used for quick estimation of crop loss.
• The Centre decided to limit its premium subsidy to 30% for unirrigated areas and 25% for irrigated ones. Previously, the central subsidy had no upper limit.
• Scheme is implemented on an Area Approach basis. The area notified is village or above with a homogenous crop cultivation and risk assessment.
• Optional enrolment: The scheme was once mandatory for loanee farmers, but since 2020, the Centre changed it to make it optional for all farmers.

Conclusion:

Climate change induced extreme weather conditions and market fluctuations have increased farmer distress. The rising number of farmer suicides and labour-migration underscore the urgent need for providing Insurance cover to safeguard farmer interests.