India’s national crop insurance reforms come to farmers’ aid

India has unveiled a new crop insurance scheme for farmers to help reduce the risks of the industry.

Two years in a row of poor monsoon rainfall have left many Indian farmers struggling as crops have failed and their livelihoods have been jeopardised.

The crop insurance scheme, which was approved by the union cabinet on Wednesday, decreases the premium that farmers have to pay to between 1.5 and 5 per cent compared to current levels, which can be as high as 25 per cent. The scheme will be subsidised by the central and state governments.


“Reforms in crop insurance is a welcome gesture by the government,” Ravi Chandran, a farmer based in Tamil Nadu, in the south of India, wrote on Twitter.

About half of India’s workforce is employed in the agriculture sector and the majority of the country’s population of more than 1.2 billion live in rural areas, which are heavily dependent on farming.

“It’s a historic decision taken by the prime minister,” said Rajnath Singh, India’s home minister, the Indian business newspaper Mint reported.

“This will safeguard farmers against inclement weather. It will also reduce the financial instability in the families of farmers.”

The scheme covers losses from natural calamities such as drought, hailstorms and landslides, for example. There is no cap on the government subsidy, whereas a limit was in place on earlier schemes, which limited their popularity.

“Farmers have not adopted insurance for various reasons and we have discussed them in detail,” according to Mr Singh. “We hope farmers will take benefit of this insurance scheme. It will be provided with the lowest premium ever in independent India.”

The government in a statement said: “The use of technology will be encouraged to a great extent. Smartphones will be used to capture and upload data of crop-cutting to reduce the delays in claim payment to farmers.”

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