The Cabinet decided to implement Prime Minister’s Crop Insurance Scheme from Kharif-2016.
The scheme will be mandatory for loanee farmers and optional for non-loanee farmers. Five clusters have been prescribed by identifying low, medium and high risk districts. In the clusters, tenders will be invited from 11 crop insurance companies enlisted by Government of India for providing crop insurance amount of actual premium rate.
As farmers’ contribution, insurance companies will realize through banks premium at the rate of 2 per cent for Kharif season’s food grains, oilseed and pulses crops, 1.5 per cent for Rabi season and 5 per cent for commercial crops. Difference between actual premium rate and amount paid by farmers will be payable as premium subsidy.
State and Central Governments will equally share payment of premium subsidy to banks. Compensation level will be 80 per cent for all crops under Prime Minister’s Crop Insurance Scheme. In case of natural calamity during sowing/planting, destruction of sprouts and post-harvest loss of crop during agriculture season will be notified by concerning collector under provisions of state level crop insurance schemes.