The government of India is providing a subsidy for crop insurance under the Pradhanmantri Fasal Bima Yojana program. Farmers will now only need to pay 1.5% to 5% of the sum insured, depending on the type of crop.
In Haryana state, a bidding of insurers for implementation of the insurance program was held. Only those companies included in a list compiled by the government were allowed to bid.
Under the program, farmer beneficiaries need to pay only a maximum of 2% of the sum insured for kharif (monsoon) crops, 1.5% for rabi (winter) crops and cotton, and 5% for horticultural and commercial crops. The rest of the amount will be subsidized by the state and central governments.
According to the Agriculture and Farmers Welfare Department, the premium payable is one of the lowest in the country. The sum insured for various crops has also been raised, said a representative of the department.
In previous schemes, since the farmers needed to pay a higher percentage as premium, the sum insured was kept low to keep premiums affordable. This lead to low payouts in case of damage to crops, which may not be enough for the farmer to recover from the lost harvest.
The crop insurance covers damage caused by floods, hailstorms, and post-harvest losses caused by out-of-season rain.
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