Non-life insurers of India hope of having harvest of around Rs 13,000 crores per annum due to Pradhan Mantri Fasal Yojna (PMFBY).
Amidst this, several states have already begun to finalize their tenders for selecting the insurance companies as to insure their crops in their states.
PMFBY is launched to provide insurance cover against the failure of the crop subsequently helping in stabilizing the incomes of farmers that further encourages them to take up new ideas.
The scheme is set to cover all food and oil seeds crops. Also, it covers commercial or horticultural crops if the past data is available.
The scheme is compulsory for a farmer obtaining crop loan and voluntary for other farmers who have insurable interest in the insured crop.
The scheme is designed in such a way that the maximum premium payable by the farmers will be two percent for all Kharif crops while for Rabi food and oil seeds. It will be 1.5 percent.
Apart from them, for commercial or horticultural crops, it will be five percent.
Moreover, state and central governments will be sharing the difference between premium and rate of insurance.