NEW DELHI: Making crop insurance voluntary to all farmers, removal of high premium crops, giving flexibility to states to provide customised add on products -- are some of the key changes the Centre is planning to make to the Pradhan Mantri Fasal Bima Yojana (PMFBY), a senior government official said Monday. 

The agriculture ministry has also proposed setting up of State Level Corpus Fund, and migration of savings to a National-level Insurance Risk Pool to quell public perception that insurance companies are making profits from the scheme, the official said. 

That apart, it has suggested a premium ceiling for coverage under the scheme at 25 per cent (to be revised every year) if irrigated area within a crop is more than 50 per cent. A premium ceiling at 30 per cent has been suggested if irrigated area within a crop is less than 50 per cent, the official added.

Launched in April 2016, PMFBY provides comprehensive crop insurance from pre-sowing to post-harvest period against non-preventable natural risks at extremely low premium rate of 2 per cent for kharif crops, 1.5 per cent for rabi crops and 5 per cent for horticulture and commercial crops. 

"PMFBY is in the seventh season of implementation. Many challenges have been faced during the implementation of the scheme and the ministry has identified those gaps and proposed several changes and souught views of state governments on the same," the official told PTI. 

Among key changes, the ministry has suggested making the scheme voluntary to all farmers including loanee farmers. This has been done because compulsory enrolment of loanee farmers was leading to dissent, the official said. 

The ministry has also proposed a two-step process of assessing crop yields required for calculating the extent of crop damage. First is elimination based on weather and other triggers, and the second step is crop cutting experiments (CCEs) in affected areas. 

Currently, plots for conducting CCEs are selected randomly leading to dissatisfaction among stakeholders. 

That apart, the ministry has proposed migration to smart sampling and optimisation of CCEs in the short run, and adoption of direct yield estimation through technology for all major crops, the official said. 

As the district crop combinations with consistently high risk lead to increase in overall premium rates, the ministry has proposed removing high premium crops from the ambit of crop insurance and suggested a premium ceiling at 25 per cent if irrigated area within a crop is more than 50 per cent and 30 per cent premium cap if irrigated area within a crop is less than 50 per cent.

Since single product type does not suffice needs of all beneficiary farmers, the ministry has suggested a basic product be made available to all farmers with flexibility to states to provide customised add on products to farmers. 

To address the delay in payment of state governments' share of subsidy, the official said the ministry has proposed deduction of overdue state subsidy from the central transfer to states. 
The ministry has also proposed three-year compulsory allocation of work to insurance companies by states to prevent repeated tendering process that delays implementation of the scheme. 

It has also suggested migration of crops having inconsistent yield data to weather-based insurance scheme.