Nitish Kumar rejects NDA's crop insurance scheme, crafts new plan instead

Patna: Bihar Chief Minister and BJP ally in the state Nitish Kumar on Tuesday formally rejected the crop insurance scheme that the NDA government had pitched as a game-changer. 

One of the sharpest critics of the centre's crop insurance scheme, Nitish Kumar has, instead, come up with his own scheme that entitles farmers to compensation without paying any premium.

Bihar government also suggested that the new scheme --- 'Bihar Rajya Fasal Sahayata Yojna' --- will have a wider coverage than the 'Pradhan Mantri Fasal Bima Yojana' that covers farmers who have taken loans from national and cooperative banks or financial institutions.

According to the central scheme, both the state and the centre bear 49 per cent of the cost of premium. Target beneficiaries have to pay the rest 2 per cent. The centre fixes the amount which a state has to pay to insurance companies under this scheme.

In the 2016 Kharif season, while Bihar paid Rs 495 crores as its share, farmers got just Rs 221 crores as compensation for crop damage, Principal Secretary (Cooperatives) Atul Prasad said.

While the centre's scheme marginally benefited farmers who had taken loans, the new scheme covers all categories of farmers, Prasad added. The scheme commences from the current Kharif season.

Ever since the central scheme was launched, Bihar Chief Minister Nitish Kumar, who was then part of an alliance with the RJD and Congress, has been critical, saying the real beneficiaries won't be farmers but insurance companies. 

According to the new scheme passed by the cabinet in Bihar, all farmers who suffer crop losses of up to 20 per cent of the threshold yield will get Rs 7,500 per hectare subject to a maximum compensation amount of Rs 15,000. The threshold yield is calculated on the basis of the average yield for the last seven years.

For crop losses beyond 20 per cent of the threshold yield, the compensation has been fixed at Rs 10,000 per hectare, with a cap of Rs 20,000. This in effect means the new scheme aims at benefitting largely small farmers who make up a sizable chunk of the state's agrarian population.

According to reports, the move also comes against the backdrop of a to and fro between Nitish Kumar's JD(U) and the BJP over who would be the face of the BJP-led National Democratic Alliance (NDA) campaign in Bihar for the 2019 general elections. It's seen as a pitch for a greater share in the number of seats by the JD(U) which walked out of the alliance with the RJD in July 2017 and re-joined the NDA fold.

According to sources, Nitish Kumar is upset with the centre allocating Rs 1,200 crores against Rs 7,600 crores he had asked as compensation for the floods that ravaged Bihar last year, killing over 500 people.

Slighted by the rejection, the government in Bihar feels that the centre has not measured up to the scale of the tragedy and now seeks to project its crop insurance scheme as a model alternative which could prod more states to opt out of the central scheme.