Madhya Pradesh Cabinet Approves Crop Insurance Scheme for Next Five Years

Bhopal, May 20: The Madhya Pradesh government has provided significant relief to farmers during the ‘Kisan Kalyan Varsh.’ Under the leadership of Chief Minister Mohan Yadav, the Madhya Pradesh Cabinet approved the continuation of the ‘Pradhan Mantri Fasal Bima Yojana’ for the next five years, with a substantial financial allocation of ₹11,608.47 crores.

This decision will protect millions of farmers in the state from crop losses due to natural disasters. Madhya Pradesh has been a leader in effectively implementing this scheme since 2016, particularly through the use of advanced technology for crop assessment and yield estimation. The state has achieved remarkable success under this initiative.

In the 2023-24 fiscal year, ₹961.68 crores were paid out in claims to 3.518 million farmers, while ₹275.86 crores were distributed to 3.556 million beneficiaries in 2024-25. These figures highlight the scheme’s extensive reach and importance in mitigating agricultural risks.

Under the Prime Minister’s Crop Insurance Scheme, farmers pay a nominal premium: just 2% for Kharif crops, 1.5% for Rabi crops, and 5% for commercial and horticultural crops. The remaining premium is shared between the central and state governments.

The state has set a compensation level of 80% for all crops, which will remain in effect for the coming years. The Cabinet has kept the option open to adopt one of two alternative implementation models: the Cup and Surplus Sharing 80-110 model or the Cup and Cap Surplus Sharing 60-130 model.

The final decision will be made based on a detailed evaluation of the merits of both models. In both cases, insurance companies bear a significant portion of the claims, while any surplus generated from lower claims is returned to the governments.

Currently, the scheme is being implemented across the state through 11 clusters, with insurance companies selected through competitive bidding. Madhya Pradesh is extensively utilizing satellite-based remote sensing technology, weather data systems, and modern data management frameworks for transparent and accurate yield assessment.

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