Rejecting the existing insurance scheme, Bihar CM Nitish Kumar pitches new insurance scheme entitled to the farmers

Patna, June 6: As a game changer, the Bihar Chief Minister Nitish Kumar has rejected the insurance scheme pitched by the center for the farmers by chalking out his own scheme, which entitles farmers to compensation without having to pay any premium.

The decision was taken in a cabinet meeting chaired by Chief Minister Nitish Kumar. Under the scheme, farmers would be paid a compensation of seven thousand five hundred rupees per hectare if less than 20% of the standing crop is damaged and ten thousand in case damage is more than 20%. Farmers do not have to pay any premium as per the scheme.

The Bihar government also suggested that the new scheme 'Bihar Rajya Fasal Sahayata Yojna' will have a wider coverage than the 'Pradhan Mantri Fasal Bima Yojana' that covers farmers who have taken loans from national and cooperative banks or financial institutions. According to the central scheme, both the state and the center bear 49 percent of the cost of the premium. Target beneficiaries have to pay the remaining 2%. The center fixes the amount which a state has to pay to insurance companies under this scheme.

The state government’s scheme is set to kicks in from the current Kharif season. According to the state's version of the crop insurance scheme, farmers who suffer crop losses of up to 20% of the threshold yield will get Rs. 7,500 per hectare subject to a maximum compensation amount of Rs. 15,000. The threshold yield is calculated on the basis of the average yield for the last seven years.

For crop losses beyond 20 % of the threshold yield, the compensation has been fixed at Rs. 10,000 per hectare, with a cap of Rs. 20,000. Effectively, the scheme aims at benefitting small farmers who make up a sizable chunk of the state's agrarian population.

Slighted by the rejection of its flood relief claim, the Bihar government feels the centre has not measured up to the scale of the tragedy. It now seeks to project its crop insurance scheme as a model alternative which could prod more states to opt out of the central scheme.