Beed Model: Maharashtra:
Maharashtra government has asked for state-wide implementation of the ‘Beed model’ of the crop insurance scheme Pradhan Mantri Fasal Bhima Yojana (PMFBY).
- Beed is a district located in the drought-prone Marathwada region.
- The district presents a challenge for any insurance company because farmers here have repeatedly lost crops either to failure of rains or too heavy rains.
- Given the high payouts, insurance companies have sustained losses.
- The solution:
- To attract the insurance companies, the state Agriculture Department decided to tweak the PMFBY guidelines for the district.
- Under the new guidelines, the insurance company provided a cover of 110% of the premium collected, with caveats.
- If the compensation exceeded the cover provided, the state government would pay the bridge amount.
- If the compensation was less than the premium collected, the insurance company would keep 20% of the amount as handling charges and reimburse the rest to the state government.