Raghav’s Take: Big Idea 3 - A Universal Crop Insurance Scheme

Raghav Bahl gives you his 5 big ideas for the PM to focus on in his second year.

What can PM Modi do to insure small and marginal farmers from agrarian distress? Raghav Bahl has a few suggestions. 

Big Idea 3: A Universal Crop Insurance Scheme for Small & Marginal Farmers

Perhaps the most tragic story of the first year of the Modi government has been the agrarian distress caused by unseasonal rains which destroyed crops.

The only way to end this misery is to insure small and marginal farmers against such vagaries. But the problem is that poor farmers cannot pay the insurance premiums that companies levy on them.

So the Modi government should launch a universal crop insurance scheme, the premium for which – estimated at about Rs 10-15,000 cr per annum - is automatically and fully paid by the central and stage governments.

This should cover each and every small farmer - say those owning less than 5 acres of farmland. Every such farmer should be given his Aadhar number, which automatically also becomes his crop insurance policy number, for which – to repeat - the premium has been pre-paid by the central government.

As soon as a district is hit by drought, a quick assessment is made, and a per acre damage claim amount is declared based on the average cropping pattern of that district and severity of the drought. The affected farmer should then simply go to the nearby post office or nationalized bank, present his Aadhar card, and get his insured amount.

Of course it shall never be as simple as this – there will be glitches and tweaks – but net net, it should be doable, once there is a government will to do it.

And if one is looking to give a bonus gift to our farmers, Prime Minister Modi could approve several GM crops, and roll back the Food Security Law to cover only the poorest 30% of our population, instead of covering even well off people, like you and me, in urban areas.