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What is Beed Model of Maharashtra

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 Model’:

  • 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.