Govt hikes farmer compensation; to provide input subsidy if 33% of crop is destroyed

The government today announced a relaxation in eligibility norms for input subsidy as well as an increase in cash compensation to farmers affected by the abnormal weather conditions

Prime Minister Narendra Modi today announced  a major change in norms for input subsidy, making farmers eligible for input subsidy if 33 per cent of their crop has been damaged, as opposed to the current norm of 50 per cent or more.

He said the input subsidy given to distressed farmers will be enhanced by 50 per cent of the existing amount, adding that this was a major departure from the incremental changes in input subsidy that had been made hitherto.

Announcing these during the launch of the Pradhan Mantri MUDRA Yojana in Mumbai today, the prime minister said the government had sent teams of central ministers to affected areas, to assess the extent of damage. He said the union and state governments, the banks and insurance companies would all do their utmost to provide relief to the farmers.

Storms and unseasonal rains have badly damaged crops in large parts of northern India, leading to farmer suicides and the farmers are now angry that the Modi government is not doing enough to help those in distress.

Reports had put the acreage of food crops affected by unseasonal rains this year to be over 10 million hectares. However, the actual area damaged due to untimely rains and hailstorm has now been estimated at 8.5 million hectares against the earlier report of 11.3 million hectares.

Farmers in India have been suffering because of low rural incomes and weak global food prices.

Modi said banks have been asked to help farmers restructure their loans, while insurance companies will also step in with support.

The agriculture ministry has directed states to disburse relief from state disaster relief funds (SDRF) without any delay and in case of shortfall, they should use their state contingency funds as well as submit their memorandums to avail assistance from NDRF.

States like Uttar Pradesh, Rajasthan and Haryana have sought central assistance and a central government team will visit the states soon.

Agriculture ministry has also directed state governments to ensure faster processing of claims under the agriculture insurance schemes. The ministry has also asked states to facilitate timely restructuring of crop loans by holding meetings of State Level Bankers' Committee.

With this, the loan repayment period would be extended by one year.