New Crops Insurance scheme: How will it benefit farmers?


  • Premium for:
  • horticulture crops reduced from 25pc to 5pc
  • Kharif crop decreased from 15pc earlier to 2pc
  • Rabi crop decreased from 15pc earlier to 1.5pc
  • Expected subsidy bill for the govt is around Rs7000cr.To be shared between centre and states in 50:50 ratio.
  • Targets to cover 50pc of the farmers
  • Govt cieling on max contribution of premium, done away with
  • pvt insurance players allowed to participate

The experts have appreciated the scheme for the following features:

  • Scheme shows very good intentions
  • The reduction in premium brings a big relief to the farmers
  • According to some experts, it is a welcome change from the earlier crop insurance scheme,
  • It will cover 100pc losses for crops unlike 50pc losses in the previous scheme
  • One time, one crop for entire country , same premium across the country
  • It includes local conditions like hail storm etc. It covers both pre harvest and post harvest losses.
  • It covers majority of the farmers. The local conditions are taken into consideration
  • The cieling on govt’s contribution to premium has been done away with
  • invlovement of pvt insurance players brings in competition,and can reduce prices in the future.


  • According to some experts in the farming community, the scheme possibly will face implementational challenges
  • The patwari still holds the authority in deciding the quantum of loss. There is discretion and subjectivity which is yet to addressed
  • It does not cover the farmers involved in cold storage. For e.g: Potatoes
  • It cannot be game changer, beacuse it addresses only the insurance aspects
  • There is a clause for mandatory use of technology in the scheme, to assess the losses. however, 83pc of farmers being poor and marginalised, may be excluded from the scheme due to the mandatory clause, as they may not be able to afford it.
  • The involvement of pvt players is questioned on the ground of govt support or subsidy to the pvt companies.
  • This is again only a weather based insurance scheme. It does not cover the price risk, due to other factors is what some experts opine
  • The use of technology is not clear. Some opine, how can smart phone and satellite possibly help.
  • There is ignorance and lack of awareness about the use of technology among the farming community at the grass roots level as well as at the administrative level.For ex- The discretion of patwari in determining the quantum of loss may side step technology as he/she may not know how to use it.


  • Despite reservations, technology is essential and useful. For eg-In kenya, the Kilimosalama, is a scheme which determines the quantum of crop loss using satellite and smart phone combination. So, definitely technology plays a positive role. Further, the Government can give detailed guidelines to the local revenue officials about the procedures and monitor it through a suitable mechanism to reduce the element of subjectivity in implementation. Furthermore, there has to be more consensus on the nature of the pvt insurance players participation along with, clarity on the type of govt support to these pvt companies. Care has to be taken that it does not hurt the interests of the farming community. The govt has to penetrate the scheme better to the local farmers. The farming community has to be made aware and educated about the scheme and use of technology. At the same time, the local agricultural and revenue administration has to be sensitized about the scheme and the use of technology along with harmonizing the interests of the farmers.


Link 1: Improved Crop Insurance: The business Standard

Link 2: Crop Insurance may bring cheers: Deccan Herald


1) Do u think the New crop insurance scheme is a game changer? Give your Arguments. Also give suggestions to overcome challenges, if any.


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