The Indian Union Cabinet has recently approved extension of subsidies for Diammonium Phosphate (DAP) fertiliser. This decision aims to support farmers amid global market volatility. The subsidy is set at ₹3,500 per metric tonne and will remain in effect from January 1, 2025, until further notice. This initiative is part of the government’s broader commitment to ensure affordable agricultural inputs for farmers.
Subsidy Details
The one-time special subsidy on DAP fertiliser is designed to stabilise prices for farmers. The government aims to ensure that DAP remains available at an affordable rate of ₹1,350 for a 50 kg bag. The total budgetary requirement for this subsidy is estimated to reach ₹3,850 crore.
Crop Insurance Schemes
The Cabinet has also approved the continuation of the Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Restructured Weather Based Crop Insurance Scheme (RWBCIS) until the financial year 2025-26. The total allocation for these schemes is approximately ₹69,515.71 crore. These initiatives aim to provide risk coverage for farmers against natural disasters.
Technological Innovations
To enhance the efficiency of crop insurance, the government has established a Fund for Innovation and Technology (FIAT) with an allocation of ₹824.77 crore. This fund will facilitate technological improvements in insurance schemes, including the implementation of the Weather Information and Network Data System (WINDS) to improve weather data collection.
MoU for Rice Trade
The Cabinet has approved a Memorandum of About (MoU) between India and Indonesia for the trade of Non-Basmati White Rice (NBWR). This agreement allows for the trading of one million metric tonnes of rice annually, based on production and international market prices.
Funding Mechanism
The funding for these schemes will be shared between the central and state governments in a 50:50 ratio. However, in the Himalayan and northeastern states, the central government will cover 90% of the funding. This approach aims to prioritise the inclusion of farmers in these regions.
Impact on Farmers
To date, about four crore farmers have benefited from crop insurance schemes, with 88% being small and marginal farmers. The government has disbursed approximately ₹1.7 trillion in insurance payouts over the past eight years. Measures are in place to penalise insurers for delays in claim disbursements, ensuring timely support for farmers.
Future Outlook
The government’s commitment to farmer welfare is evident through these initiatives. The extended subsidies and enhanced insurance schemes are expected to provide support to the agricultural sector, promoting stability and growth.
Questions for UPSC:
- Critically analyse the impact of the Pradhan Mantri Fasal Bima Yojana on small and marginal farmers in India.
- What are the key features of the Fund for Innovation and Technology? How will it enhance crop insurance schemes?
- Estimate the significance of the MoU between India and Indonesia for Non-Basmati White Rice trade.
- Point out the challenges faced by the agricultural sector in India amidst global market volatility.
Answer Hints:
1. Critically analyse the impact of the Pradhan Mantri Fasal Bima Yojana on small and marginal farmers in India.
- PMFBY provides risk coverage, benefiting 88% of small and marginal farmers.
- It has disbursed approximately ₹1.7 trillion in payouts over the past eight years.
- Facilitates access to financial support during natural calamities, enhancing resilience.
- Delays in claim disbursement are penalized, promoting timely assistance.
- Encourages adoption of modern farming practices through insurance coverage.
2. What are the key features of the Fund for Innovation and Technology? How will it enhance crop insurance schemes?
- FIAT is allocated ₹824.77 crore for technological improvements in insurance schemes.
- It aims to enhance efficiency in claim settlements and farmer enrollment processes.
- Implementation of WINDS will improve weather data collection for better risk assessment.
- Supports development of innovative insurance products tailored to farmers’ needs.
- Encourages collaboration with tech firms to integrate advanced solutions in agriculture.
3. Estimate the significance of the MoU between India and Indonesia for Non-Basmati White Rice trade.
- Facilitates annual trade of one million metric tonnes, enhancing bilateral relations.
- Stabilizes rice prices in India by ensuring consistent demand and supply.
- Provides Indian farmers access to international markets, boosting income opportunities.
- Strengthens India’s position in global agriculture trade, promoting food security.
- Encourages agricultural exports, contributing to economic growth and development.
4. Point out the challenges faced by the agricultural sector in India amidst global market volatility.
- Fluctuating prices of essential inputs like fertilizers and seeds affect profitability.
- Climate change leads to unpredictable weather patterns, impacting crop yields.
- Global supply chain disruptions can hinder access to markets and resources.
- Dependence on monsoon makes farmers vulnerable to droughts and floods.
- Small farmers struggle with access to credit and technology, limiting productivity.
