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GS Paper: Agriculture and related issues

  • Agriculture Infrastructure Fund (AIF) Scheme

    Why in the News?

    Punjab has fully utilized ₹4,713 crore allocated under the Agriculture Infrastructure Fund (AIF), making it the top-ranked state in India for implementing this scheme.

    As a result, Punjab has been granted an additional ₹2,337 crore to further expand its agricultural infrastructure projects.

    What is the Agriculture Infrastructure Fund (AIF) Scheme?

    • The AIF is a ₹1 lakh crore financing facility launched by the Government of India in July 2020 to support post-harvest agricultural infrastructure and community farming assets.
    • AIF provides medium- to long-term debt financing at subsidized interest rates, along with credit guarantee support, to eligible beneficiaries.

    Key Features of the AIF Scheme:

    • Total Corpus & Disbursement: ₹1 lakh crore, disbursed over 10 years (2020-21 to 2029-30).
    • Interest Subvention & Loan Benefits:
      • 3% interest subvention on loans up to ₹2 crore.
      • Credit guarantee support through CGTMSE and NABSanrakshan.
      • Maximum interest rate capped at 9% for a 7-year tenure.
    • Eligible Projects:
      • Post-harvest infrastructure: Warehouses, cold storage, silos, drying yards, sorting, and packaging units.
      • Processing & Value Addition: Food processing plants, oil mills, flour mills, kinnow and cashew processing.
      • Technology-driven solutions: Drone projects, hi-tech farm equipment rental centers.
      • Renewable energy: Solar-powered irrigation and cold storage units.
    • Integration with Other Government Schemes: Can be combined with State & Central subsidies for maximum benefit.
    • Implementation & Monitoring:
      • Managed via online MIS platform for real-time tracking.
      • National, State & District-level monitoring committees ensure effective execution.

    Eligible Beneficiaries Under AIF:

    • Individual Farmers:  Seeking on-farm storage or processing units.
    • Farmer Producer Organizations (FPOs):  For community-based infrastructure.
    • Self-Help Groups (SHGs) & Joint Liability Groups (JLGs): Engaged in agricultural activities.
    • Cooperative Societies & Primary Agricultural Credit Societies (PACS): For collective farming and value addition.
    • Startups & Agri-Tech Companies: Developing post-harvest management solutions.
    • State Agencies & PPP Projects: Government-backed rural infrastructure projects.
    • Entrepreneurs & Agripreneurs: Working in food processing and value addition.

    PYQ:

    [2017] Which of the following is/are the advantage/advantages of implementing the ‘National Agriculture Market’ scheme?

    1. It is a pan-India electronic trading portal for agricultural commodities.

    2. It provides the farmers access to nationwide market, with prices commensurate with the quality of their produce.

    Select the correct answer using the codes given below:

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

     

  • Over 70% Farmers still use Cash to sell their Produce

    Why in the News?

    The Reserve Bank of India (RBI) survey on agricultural transactions reveals that cash remains the primary mode of payment among farmers, although digital payments are gradually increasing. Despite the rise of Unified Payments Interface (UPI) and mobile banking, over 70% of Indian farmers still rely on cash for selling their produce.

    Key Findings of the RBI Survey

    • In 2019, 88% of farmers used cash for transactions. By 2022, this figure dropped to 79% and further declined to 72% in 2024.
      • However, this transition is slow compared to other sectors of the economy.
    • The share of farmers using electronic payments has increased from 8% in 2019 to 18% in 2024.
    • Among traders, the adoption of digital payments has been faster, rising from 8% in 2019 to 31% in 2024.
    • Among retailers, the usage of electronic payments increased from 3% in 2019 to 22% in 2024.

    Reasons behind low Digital Adoption

    • 55% of farmers rely on traders to determine market prices, up from 47% in 2019. 47% depend on fellow farmers, while fewer than 10% use apps or websites to check market rates.
      • Despite the growth of agri-tech platforms, most farmers still depend on word-of-mouth rather than digital sources for price information.
    • Multiple intermediaries in the supply chain reduce farmers’ share in the final consumer price.
    • 64% of farmers reported crop damage during the 2023-24 rabi season. Unseasonal rainfall was cited as the top reason (37%), followed by heatwaves (30%).
    • As a result, 90% of farmers consider weather forecasts as the most important factor in crop-sowing/ harvesting decisions.

    PYQ:

    [2010] With reference to India, consider the following:

    1. Nationalisation of Banks
    2. Formation of Regional Rural Banks
    3. Adoption of village by Bank Branches

    Which of the above can be considered as steps taken to achieve the “financial inclusion” in India?

    (a) 1 and 2 only
    (b) 2 and 3 only
    (c) 3 only
    (d) 1, 2 and 3

    [2016] Pradhan Mantri Jan Dhan Yojana (PMJDY) is necessary for bringing unbanked to the institutional finance fold. Do you agree with this for financial inclusion of the poorer section of the Indian society? Give arguments to justify your opinion.

     

  • [pib] 10 Years of Soil Health Cards Scheme

    Why in the News?

    It has been 10 years since the Soil Health Card Scheme was introduced by Prime Minister Shri Narendra Modi on 19th February 2015 at Suratgarh, Rajasthan.

    What is the Soil Health Card Scheme?

    • The SHC Scheme was launched to analyze soil quality and provide personalized recommendations to farmers for nutrient management and soil fertility improvement.
    • The scheme is implemented by the Department of Agriculture & Farmers’ Welfare.
    • It has been integrated into Rashtriya Krishi Vikas Yojana (RKVY) since 2022-23 under the Soil Health & Fertility component.

    Key Features of the Soil Health Card Scheme:

    • SHC evaluates 12 parameters, including:
      • Macronutrients: N, P, K, S.
      • Micronutrients: Zn, Fe, Cu, Mn, B.
      • Physical & Chemical Properties: pH, EC, OC.
    • Samples collected twice a year (post-Rabi and Kharif).
    • Grid-based sampling: 2.5 ha in irrigated areas, 10 ha in rain-fed areas.
    • SHC Portal & Mobile App enable online tracking, GPS-tagged samples, and QR-coded test results.
    • Village-Level Soil Testing Labs (VLSTLs): 665 VLSTLs established across 17 states for local soil testing.
    • School Soil Health Programme: Implemented in 1020 schools, with 1000 soil testing labs and 125,972 students enrolled.

    Successes and Limitations of SHC:

    Success:

    • Crop Yields & Productivity Increased (8-10%) through optimized fertilizer application.
    • Farmers saved up to ₹5,000 per hectare by using balanced fertilizers.
    • 665 Village-Level Soil Testing Labs (VLSTLs) established, improving soil testing accessibility.
    • Technological integration (SHC Portal & Mobile App) ensures real-time monitoring.
    • Encouraged sustainable farming practices, reducing soil degradation and nutrient depletion.

    Limitations and Challenges:

    • Many farmers are unaware of SHC benefits and continue traditional farming methods.
    • Reports often reach farmers too late for implementation.
    • Limited soil testing labs and trained staff in remote areas.
    • Farmers need training to interpret SHC reports and apply recommendations.

     

    PYQ:

    [2017] Consider the following statements:

    The nation-wide ‘Soil Health Card Scheme’ aims at-

    1. expanding the cultivable area under irrigation.

    2. enabling the banks to assess the quantum of loans to be granted to farmers on the basis of soil quality.

    3. checking the overuse of fertilizers in farmlands.

    Which of the statements given above is/are correct?

    (a) 1 and 2 only

    (b) 3 only

    (c) 2 arid 3 only

    (d) 1, 2 and 3

     

  • Prime Minister Dhan-Dhaanya Krishi Yojana (PMDKY)

    Why in the News?

    Finance Minister while presenting the Union Budget announced the launch of the Prime Minister Dhan-Dhaanya Krishi Yojana (PMDKY).

    About the Prime Minister Dhan-Dhaanya Krishi Yojana (PMDKY):

    • The PMDKY aims to enhance agricultural productivity, crop diversification, storage infrastructure, irrigation, and credit access.
    • Key Features
      • Identifies 100 districts with low productivity, moderate cropping intensity, and below-average credit access.
      • Develops panchayat/block-level storage and expands irrigation coverage.
      • Ensures affordable short-term & long-term loans for farmers.
      • Uses data-driven governance & district rankings.
    • Structural Mandate:
      • Implementation: Jointly executed by Central & State Governments.
      • Funding: Drawn from existing schemes under the Ministry of Agriculture & Farmers’ Welfare and the Ministry of Fisheries, Animal Husbandry & Dairying.
      • Evaluation: Assessed based on yield improvements, credit flow, and irrigation expansion.

    PYQ:

    [2015] ‘Pradhan Mantri Jan-Dhan Yojana’ has been launched for:

    (a) providing housing loan to poor people at cheaper interest rates

    (b) promoting women’s Self-Help Groups in backward areas

    (c) promoting financial inclusion in the country

    (d) providing financial help to the marginalized communities

     

  • 10 New Agricultural Commodities added to the E-NAM platform

    Why in the News?

    The Agriculture Ministry has allowed trading of 10 additional commodities on the electronic-National Agriculture Market (E-NAM), taking the total number of tradable items on the platform to 231.

    About the 10 new commodities:

    The newly added commodities include dried Tulsi leaves, Besant (Chickpea flour), wheat flour, chana sattu (Roasted Chickpea Flour), water Chestnut flour, asafoetida, dried fenugreek leaves, baby corn, dragon fruit and water Chestnut, the ministry said in a statement.

    Current Status of E-NAM (As of December 2024):

    • 1,410 mandis connected across 22 states and Union Territories.
    • Inter-state trade worth ₹5,022 crore has been recorded.
    • ₹6,831 crore e-payments made across 948 mandis.
    • Trade in 1.44 lakh metric tonnes of grains and 3.4 crore units of perishable commodities such as bamboo, betel leaves, coconuts, and lemons.

    What is E-NAM?

    • E-NAM is a pan-India electronic trading platform launched by the Government of India on April 14, 2016.
    • It integrates existing Agriculture Produce Market Committees (APMCs) to create a unified national market for agricultural commodities.
    • The Small Farmers Agribusiness Consortium (SFAC), under the Ministry of Agriculture and Farmers’ Welfare, is the implementing agency for e-NAM.
    • The platform enables farmers, traders, and buyers to trade agricultural commodities online, across states, ensuring better price discovery and transparency.

    Objectives of e-NAM

    • Improve market efficiency by integrating APMC mandis into a unified online platform.
    • Enhance price discovery through a competitive bidding process, ensuring fair market prices for farmers.
    • Promote inter-state trade by removing barriers and unifying agricultural markets across India.
    • Reduce dependency on middlemen, ensuring direct benefits to farmers.
    • Facilitate e-payments to ensure quick and transparent financial transactions for farmers.

    What is E-NAM 2.0?

    • E-NAM 2.0 is an upgraded version of the Electronic National Agriculture Market (e-NAM), launched to improve inter-state agricultural trade, logistics, and digital accessibility for farmers.
    • It integrates logistics service providers, allowing farmers to sell produce directly from their farms using a farm-gate module.
    • Key features include real-time price discovery, Aadhaar-based e-KYC, warehouse-based trading, and direct online payments.
    • The platform enhances transparency, efficiency, and access to a nationwide market, reducing dependence on middlemen.
    • It aims to boost farmer incomes, minimize wastage, and create a unified digital agricultural ecosystem across India.

     

    PYQ:

    [2017] What is/are the advantage/advantages of implementing the ‘National Agriculture Market’ scheme?

    1. It is a pan-India electronic trading portal for agricultural commodities.
    2. It provides the farmers access to nationwide market, with prices commensurate with the quality of their produce.

    Select the correct answer using the code given below:

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

  • New Makhana Board and Food Institute to be opened in Bihar

    Why in the News?

    The Union Budget 2025 has announced the establishment of a Makhana Board in Bihar to improve production, processing, value addition, and marketing of makhana (fox nut).

    What is Makhana? 

    makhana

    • Makhana, also known as fox nut, is the edible seed of the prickly water lily (Euryale ferox), grown in freshwater ponds across India and South Asia.
    • Bihar produces 90% of India’s makhana, with major hubs in Darbhanga, Madhubani, Purnea, and Katihar.
    • It is nutrient-rich, low-fat, and considered a superfood, gaining popularity in domestic and international markets.
    • Traditionally used in religious rituals, makhana is now promoted for its health benefits and commercial potential.

    About the Makhana Board 

    • The Makhana Board will train farmers, ensure market access, regulate pricing, and promote exports.
    • The Food Processing Institute will focus on value addition, quality control, research, and global trade facilitation.
    • Aims & Objectives:
      • Increase production by promoting high-yield varieties like Swarna Vaidehi and Sabour Makhana-1.
      • Improve processing infrastructure to reduce wastage and enhance product quality.
      • Support exports through cargo infrastructure, trade partnerships, and branding initiatives.
    • Structural Mandate:
      • Governing body led by government officials, farmer representatives, and industry experts.
      • Regional centers in key makhana-producing districts to assist farmers.
      • Partnerships with ICAR, NABARD, and agricultural universities for research and financial support.
      • ₹100 crore initial funding for infrastructure, training, and market expansion.
    • Powers & Functions: Regulate production, enforce quality standards, provide subsidies, promote research, develop export infrastructure, and launch branding campaigns.

  • Agriculture is fiscally neglected in the Budget

    Why in the News?

    A budget reflects how a government addresses the challenges in the economy. The Economic Survey 2024-25 tried to present a positive view of Indian agriculture’s situation.

    What are the specific budget allocations for agriculture?

    • Total Allocation: The Union Budget for 2025-26 has allocated ₹1.71 lakh crore for agriculture and allied activities, an increase from ₹1.51 lakh crore in the previous fiscal year.
    • Prime Minister Dhan-Dhaanya Krishi Yojana: This new initiative aims to enhance agricultural productivity in 100 districts with low productivity, targeting 1.7 crore farmers through sustainable practices and improved irrigation facilities.
    • Kisan Credit Card (KCC) Expansion: The loan limit under the Modified Interest Subvention Scheme for KCCs will be raised from ₹3 lakh to ₹5 lakh, facilitating better access to credit for farmers.
    • PM-Kisan Scheme: The allocation for the PM-Kisan scheme remains at ₹63,500 crore, consistent with the revised estimates from the previous year, aimed at providing direct income support to farmers.
      • The PM-Kisan scheme provides annual income support of ₹6,000 to eligible farmers, distributed in three instalments, which is crucial for enhancing their financial stability.
    • Pradhan Mantri Fasal Bima Yojana: This crop insurance scheme has seen a significant reduction in funding, with allocations decreasing from ₹14,600 crore in previous estimates to ₹12,242.27 crore for 2025-26.
    • Makhana Board: A new Makhana Board in Bihar has been allocated ₹100 crore, while other missions include ₹100 crore for hybrid seeds and ₹500 crore for cotton technology.
    • National Mission on Natural Farming: The mission received a significant allocation of ₹516 crore, emphasizing sustainable agricultural practices and increasing the adoption of natural farming methods.
    • Support for Pulses and Oilseeds: The government is launching a six-year mission focused on self-sufficiency in pulses and edible oils, with procurement support from agencies like NAFED and NCCF, aiming to enhance domestic production.

    What measures are being proposed to support farmers and enhance agricultural productivity?

    • Prime Minister Dhan-Dhaanya Krishi Yojana: This new scheme aims to target 100 districts with low productivity, focusing on improving crop intensity and credit parameters. However, concerns exist regarding its centralized governance approach.
    • Investment in Sustainable Practices: The government emphasizes sustainable agriculture practices through initiatives like the Pradhan Mantri Krishi Sinchayi Yojana (PMKSY) aimed at enhancing irrigation efficiency.
    • Post-Harvest Infrastructure Investment: The Agriculture Infrastructure Fund (AIF) is highlighted as a mechanism to improve post-harvest infrastructure, although specific allocations remain unclear.

    Does the budget reflect the broader economic context and challenges?

    • Addressing Farmer Distress: The budget reflects the urgent need to address farmer distress by extending support measures such as lower loan interest rates and increased PM-KISAN assistance.
    • Investment in Sustainable Practices: The budget emphasizes the importance of sustainable agriculture, with recommendations for increased investment in climate-resilient seeds and agricultural research.
    • Post-Harvest Management Improvements: Recognizing significant post-harvest losses, the budget allocates funds to improve cold storage and processing facilities. This investment is crucial for reducing waste and enhancing the value chain, which is vital for improving farmers’ profitability and food security.
    • Focus on Technological Adoption: There is a push for greater adoption of agri-tech solutions to tackle issues like low mechanization and inadequate access to quality seeds. This reflects an understanding that modernizing agriculture is essential for boosting productivity and competitiveness in a challenging economic environment.
    • Long-Term Structural Reforms: The budget indicates a need for transformational changes rather than incremental adjustments, advocating for a shift from subsidy-heavy approaches to investment-driven growth.
      • This strategic direction aims to make Indian agriculture more resilient and globally competitive by 2047.

    Way forward: 

    • Increased Investment in Agricultural R&D and Infrastructure – The government should prioritize higher allocations for agricultural research, modern irrigation techniques, and post-harvest infrastructure to enhance productivity and climate resilience.
    • Targeted Financial Support and Market Reforms – Strengthening direct income support, improving crop insurance schemes, and ensuring better price realization through MSP reforms and enhanced market linkages will help stabilize farmers’ incomes and boost rural demand.

    Mains PYQ:

    Q Explain various types of revolutions, took place in Agriculture after Independence in India. How these revolutions have helped in poverty alleviation and food security in India? (UPSC IAS/2017)

  • Only a radical policy shift can lift farmers from widespread distress

    Why in the News?

    Agriculture has been given little attention, even though the National Crime Records Bureau (NCRB) data shows that 1,00,474 farmers and agricultural workers took their own lives between 2015 and 2022.

    What are the root causes of the current agrarian distress faced by farmers in India?

    • Unmet Minimum Support Price (MSP) Promise: Despite repeated promises, the government has failed to implement the MSP at the rate of C2+50% (one-and-a-half times the comprehensive cost of production) as recommended by the M.S. Swaminathan Commission.
    • Rising Input Costs and Economic Burden: The cost of agricultural inputs such as fertilizers, seeds, insecticides, diesel, water, and electricity has been steadily rising.
    • Inadequate Government Support and Infrastructure: Government allocations to agriculture and allied sectors have been declining, from 5.44% of the total budget in 2019 to just 3.15% in 2024.
      • At the same time, public investment in irrigation and power infrastructure has decreased, leading to water scarcity and unreliable electricity supply.

    How can policy reforms effectively address the challenges faced by farmers?

    • Implementation of MSP: Establishing a statutory MSP at C2+50% is essential to ensure that farmers receive fair compensation for their produce. This reform would help alleviate financial distress and reduce the incidence of farm suicides.
    • Subsidy Increases and Cost Controls: The government should raise subsidies for agricultural inputs and impose strict controls on prices charged by private corporations for fertilizers and seeds. Supporting public sector production can help stabilize prices and ensure availability.
    • Comprehensive Loan Waiver: A one-time loan waiver for farmers can provide immediate relief from debt burdens. This measure should be coupled with long-term strategies to prevent future indebtedness through better financial management and support systems.

    What role do government support and institutional frameworks play in alleviating farmer distress?

    • Financial Assistance and Subsidies: Government support through subsidies for fertilizers, seeds, and irrigation systems helps reduce the financial burden on farmers. For example, the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) provides direct income support to farmers, aiding those facing economic hardship.
    • Crop Insurance and Risk Mitigation: Institutional frameworks such as the Pradhan Mantri Fasal Bima Yojana (PMFBY) offer insurance schemes to protect farmers against crop losses due to natural disasters, thereby reducing the risk of distress when unforeseen events occur.
    • Market Access and Price Support: The government ensures fair prices and stable markets through Minimum Support Price (MSP) and procurement schemes. The Food Corporation of India (FCI) buys surplus crops like wheat and rice from farmers at MSP, offering a safety net during market fluctuations.
    • Agricultural Credit and Loans: Institutional frameworks like the NABARD (National Bank for Agriculture and Rural Development) and other banks offer affordable loans to farmers, allowing them to invest in better farming techniques or recover from losses, thus mitigating financial stress.
      • For example, Kisan Credit Cards (KCC) provide short-term credit to meet the farmers’ needs for inputs and daily expenses.

    Way forward: 

    • Strengthen Infrastructure and Support Systems: Invest in reliable irrigation, power supply, and crop insurance schemes, ensuring farmers have access to resources that help them cope with climate-related challenges and reduce dependency on private traders.
    • Enhance Financial Accessibility and Risk Management: Expand access to affordable credit, implement statutory MSP at C2+50%, and provide better financial literacy programs to help farmers manage debts and reduce vulnerability to market fluctuations.

    Mains PYQ:

    Q Explain various types of revolutions, took place in Agriculture after Independence in India. How these revolutions have helped in poverty alleviation and food security in India? (UPSC IAS/2017) 

  • Rythu Bharosa Scheme

    Why in the News?

    The Telangana government has started distributing funds under the Rythu Bharosa Scheme, also known as the Farmer’s Investment Support Scheme (FISS).

    About the Rythu Bharosa Scheme:

    • The Rythu Bharosa Scheme, also known as the Farmer’s Investment Support Scheme (FISS), was launched by the Telangana government in 2018 to provide direct financial assistance to farmers.
    • It is the first direct investment support scheme in India, where cash is transferred directly to farmers before each crop season to help them with agricultural expenses.
    • Objective: To reduce financial burden, improve agricultural productivity, and prevent farmers from falling into debt traps due to high input costs.
    • Provisions:
      • Under the scheme, every farmer receives ₹5,000 per acre per crop season, ensuring ₹10,000 per acre annually for two crop seasons.
      • The financial assistance is provided before the sowing season, allowing farmers to plan their investments efficiently.
      • There is no limit on the size of landholdings, meaning both small and large farmers can benefit.
    • Criteria:
      • The scheme is available only to resident farmers of Telangana who own agricultural land in the state.
      • Scheduled Tribe (ST) farmers cultivating land with Record of Forest Rights (ROFR) documents are eligible for assistance.
      • Tenant farmers, commercial farmers, and those farming under contractual agreements are not eligible to receive benefits under this scheme.
      • The funds are disbursed through bank bearer cheques under the supervision of Agriculture Extension Officers to ensure transparent distribution.

    PYQ:

    [2020] Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes?

    1. Working capital for maintenance of farm assets
    2. Purchase of combine harvesters, tractors and mini trucks
    3. Consumption requirements of farm households
    4. Post-harvest expenses
    5. Construction of family house and setting up of village cold storage facility

    Select the correct answer using the code given below:

    (a) 1, 2 and 5 only
    (b) 1, 3 and 4 only
    (c) 2, 3, 4 and 5 only
    (d) 1, 2, 3, 4 and 5

  • Union Cabinet approved the continuation of PMFBY and RWBCIS until 2025-26

    Why in the News?

    The government extended two crop insurance schemes, Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS), for another year until 2025-26. It also set aside ₹824.77 crore to improve these schemes using advanced technology.

    What are the provisions and key features of PMFBY?

    • Comprehensive Risk Coverage: PMFBY provides coverage against all non-preventable natural risks from pre-sowing to post-harvest stages, including droughts, floods, and pests.
    • Subsidised Premium Rates: Farmers pay a fixed premium of 1.5% for rabi crops, 2% for kharif crops, and 5% for cash crops. The remaining premium is shared between the central and state governments.
    • Financial Support: It offers financial assistance to farmers suffering from crop loss due to unforeseen events, aiming to stabilise their income and encourage modern agricultural practices.
    • Technology Integration: The scheme incorporates technological initiatives like YES-TECH for yield estimation and WINDS for weather data collection, enhancing efficiency in claim settlement.

    Why was RWBCIS introduced?

    • Financial Protection Against Weather Risks: RWBCIS was introduced to safeguard farmers from financial losses caused by adverse weather conditions such as rainfall, temperature fluctuations, wind, and humidity, which can severely impact crop yields and farmer income.
    • Comprehensive Coverage for Various Crops: The scheme aims to provide insurance protection for a wide range of crops, including food crops, oilseeds, and commercial or horticultural crops, thereby mitigating the impact of natural calamities like droughts and floods on farmers’ livelihoods.

    What is the difference between PMFBY and RWBCIS?

    PMFBY (Pradhan Mantri Fasal Bima Yojana) RWBCIS (Restructured Weather-Based Crop Insurance Scheme)
    Launch Launched in 2016 (replacing NAIS and MNAIS). Introduced in 2016 to safeguard farmers against adverse weather conditions.
    Primary Focus Protects against crop failure due to natural calamities, pests, diseases. Provides insurance based on weather parameters (e.g., rainfall, temperature, wind) to mitigate financial losses from weather extremes.
    Risk Assessment Method – Area-based approach with crop-cutting experiments, remote sensing, etc.
    – Yield vs. threshold yield determines compensation.    		 – Weather-based triggers using data from weather stations.
    – Predefined thresholds (e.g., rainfall levels) activate payouts automatically.
    Premium Structure – Uniform, capped rates for farmers: 2% for Kharif, 1.5% for Rabi, 5% for horticulture/commercial crops.
    – No upper limit on government subsidy.    		 – Varies based on weather risks and policy design.
    – Similar subsidy approach, but rates are dependent on specific weather-based insurance products.
    Coverage – All notified crops in a defined area.
    – Includes food crops, oilseeds, and commercial/horticultural crops.    		 – Covers food crops, oilseeds, and commercial/horticultural crops for weather-induced losses (e.g., drought, flood, cyclone, hailstorm).
    Enrollment – Initially compulsory for farmers with crop loans (KCC).
    – Made voluntary for all farmers from Kharif 2020.    		 – All farmers, including sharecroppers and tenant farmers, are eligible if they grow notified crops in notified areas.
    Key Objectives – Provide financial support and stabilize income in the event of crop failure.
    – Encourage innovative and modern farming practices.    		 – Protect farmers from weather aberrations, ensuring swift compensation when weather thresholds are met or breached.
    Unique Features – “One Nation, One Scheme” concept.
    – Loss-based compensation linked to actual yield shortfall.    		 – Trigger-based system; payouts depend on deviation from normal weather parameters (no extensive damage assessment).

    What is the role of FIAT in crop insurance schemes?

    The Fund for Innovation and Technology (FIAT) has been established with a corpus of ₹824.77 crore to enhance the implementation of PMFBY and RWBCIS. There are various key roles:

    • Technological Advancement: Funding technological initiatives aimed at improving the assessment of crop damage and expediting claim settlements.
    • Research Support: Facilitating research and development studies that enhance the effectiveness of crop insurance schemes through innovative practices.
    • Improving Accessibility: Aiding in the use of digital technologies for easier enrollment processes and expanding coverage among farmers.

    Way forward: 

    • Strengthening Awareness and Accessibility: Increase farmer outreach through targeted awareness campaigns and simplify enrollment processes using digital platforms to ensure maximum participation in crop insurance schemes.
    • Enhanced Technology Integration: Expand the deployment of advanced tools like remote sensing and automated weather monitoring to improve accuracy in loss assessment, and claim settlements, and minimize disputes.

    Mains PYQ:

    Q How do subsidies affect the cropping pattern, crop diversity and economy of farmers? What is the significance of crop insurance, minimum support price and food processing for small and marginal farmers? (UPSC IAS/2017)