On December 28, 2019, The central Government has formed a 7-member group of ministers (GoM) headed by Defense Minister Rajnath Singh to review the crop insurance scheme ,“Pradhan Mantri Fasal Bima Yojana (PMFBY)” & make suggestions to improve it according to the needs of the farmers.Key Points:
i.7-member panel: The group also includes Home Minister (HM) Amit Shah and Agriculture Minister Narendra Singh Tomar and Minister of State for Agriculture, Finance, Tribal Affairs and Animal Husbandry.
ii.Background:This move comes after the concerns over growing dissent among farmers about the Scheme, dropping out of 4 insurance companies (ICICI Lombard, Tata AIG, Cholamandalam MS, and Shriram General Insurance). States like Bihar, West Bengal and Andhra Pradesh(AP) have also distanced themselves from the scheme.
iii.Concerns: The states say that the insurance companies benefited more from the farmers than the Crop Insurance Scheme. Some more states like Odisha, Karnataka & Gujarat have also expressed their desire to start their own scheme.The rationale of these states is that farmers are not being compensated according to the premium paid.
iv.Reforms sought: For a long time there has been a demand that crop insurance for farmers should be voluntary & high premium crops should be excluded from this scheme. Apart from this, every state should have the right to include crop insurance products according to the needs of the farmers of their state.
About Pradhan Mantri Fasal Bima Yojana (PMFBY):
The scheme was launched on 14th January 2016. The objective of this scheme is to provide financial support to farmers suffering from crop loss or damage due to an unforeseen event.
Under this scheme, the government provides crop insurance to the farmers and they have to pay a premium of 1.5%, 2% and 5% for rabi, Kharif and horticulture crops respectively.