NITI Aayog has proposed that 75% of the premium paid by farmers under the Pradhan Mantri Fasal Bima Yojana (PMFBY) will be returned to them if they don’t file claims for crop damages for four-six consecutive agricultural seasons. Government officials reckon that such a move would attract more farmers into the insurance fold; at present, just 29% of the 12 crore farmers/cultivators in the country are covered under the crop insurance scheme. However, the proposed change is likely to not find favour among insurers. While the government probably sees the estimated Rs 10,000 crore lying with insurers over the last two kharif seasons as an undue benefit accruing to the insurers at the cost of the farmer, the fact is that agriculture is an high-risk activity given so much of it rain-dependent. This risk will increasingly get worse with climate change impact worsening.
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