Cabinet approves changes in farm insurance scheme

NEWDELHI:THE Union Cabinet on Wednesday approved sweeping changes to the Pradhan Mantri Fasal Bima Yojana (PMFBY), the country’s flagship farm insurance scheme, making it voluntary for farmers who take farm loans.

Launched in 2016 to replace a complex set of insurance schemes, the PMFBY was mandatory for all farmers who take crop loans. Such farmers will now no longer be required to buy an insurance scheme if they didn’t want to. HT had first reported the proposal to make the crop insurance programme optional on August 17, 2019.

Institutional credit in the agriculture sector refers to all loans disbursed through scheduled commercial banks, cooperatives and rural regional banks. Farmers rely on agricultural credit to purchase various inputs, from fertilizers to irrigation equipment. The scheme is voluntary for those farmers who don’t avail of any loans.

The Cabinet, chaired by Prime Minister Narendra Modi, approved revamping of PMFBY, along with the Restructured Weather Based Crop Insurance Scheme (RWBCIS), to “address the existing challenges in implementation of crop insurance schemes,” an official statement said. “The changes to PMFY were necessary based on lessons learnt since its launch. Delinking crop loans and insurance is step towards simplifying the scheme,” said TN Sinha, a former faculty at the Tamil Nadu Agricultural University.

THE PRADHAN MANTRI FASAL BIMA YOJANA WAS MANDATORY FOR ALL FARMERS WHO TAKE CROP LOANS. NOW IT WILL BE VOLUNTARY