Mumbai: Government is working on a new agriculture insurance scheme that will cover all the inputs put by a farmer into his farm as also the loans taken by him, Finance Minister Arun Jaitley said on Sunday.
"Hopefully, in the near future, a viable and vibrant insurance scheme will be in place for farmers," Jaitley said.
"Dr Ashok Gulati (Infosys Chair Professor for Agriculture at Icrier) just now made a very valuable presentation to the Finance Ministry where he came out with a doable and effective insurance programme, wherein the farmer is able to at least recover the basic inputs that he puts in, in the events of uncertainties created by more than one reasons," Jaitely told the 34th Foundation Day celebrations of Nabard here.
The present crop insurance schemes cover only the loans which a farmer has taken from banks.
Noting that the agriculture sector presents its own set of challenges with successive low rate of growth over the years, he admitted, "We have been unable to ensure even a 4 per cent growth consistently in the field of agriculture."
"With productivity levels reasonably low and 85 per cent farmers being small and marginal, the agriculture sector is afflicted by higher input costs, low level of irrigation, high indebtedness, absence of an effective insurance mechanism and adverse impacts of climate change," he said.
The Met department has predicted a 13 per cent fall in rain falls this monsoon season. While the June rainfall was 25 per cent in excess of the average, July so far has been over 50 per cent deficient. Many international agencies have forecast a strong El Nino effect on the rainfall season in the year and even a possible drought.
Speaking at the same event, RBI Deputy Governor HR Khan also said the government is working on the new insurance schemes for farmers and RBI has also sent its comment on it.
"We have national insurance, we have modified national insurance and now we are going for weather- based insurance cover and there is a talk about income insurance for farmers which has become a major issue," Khan said.
He said the cost to the government in subsiding for such insurance schemes will not be large if there is willingness to do it.
Calling for higher investments in the rain-dependent agriculture sector and also for building rural infrastructure, Jaitley said a large chunk of investment must be channelised for developing rural infrastructure, with special emphasis on irrigation.
"States like MP which has invested in irrigation have seen almost immediate results. It is this example we need to emulate," he said.
The Minister further said this was one of the reasons behind the newly announced ambitious national irrigation scheme, entailing an investment of Rs 50,000 crore over a period of five years.
He also launched the 'Nabard Rural Economy Tracker' which gives a real-time overview of rural development.
