Govt approves changes in PMFBY to make it optional for farmers

The government on Wednesday tweaked the crop insurance schemes, making them voluntary for farmers opting for crop loans—a key demand of various farmers' representatives.

The Union Cabinet approved the revamping of 'Pradhan Mantri Fasal Bima Yojana (PMFBY)' and 'Restructured Weather Based Crop Insurance Scheme (RWBCIS)' to address the existing challenges in the implementation of crop insurance schemes, Agriculture Minister Narendra Singh Tomar told reporters here.

The PMFBY, launched in February 2016 by Prime Minister Narendra Modi, was mandatory for farmers availing loans from credit institutions.

The Cabinet decided to modify certain parameters and provisions of the ongoing schemes of PMFBY and RWBCIS under which allocation of business to insurance companies will be done for three years instead of the one to three years at present.

In a separate decision, the Cabinet also approved a scheme to promote the dairy sector which will benefit about 95 lakh farmers.

The scheme entails increasing the interest subsidy under the scheme Dairy Processing and Infrastructure Development Fund (DIDF) with a revised outlay of Rs 11,184 crore.

Under DIDF, the central government will provide an interest subvention up to 2.5% to Nabard from 2019-20 (with effect from July 30, 2019) to 2030-31. Any increase in the cost of funds would be borne by the end borrowers.