Govt widens relief net for crop loss, hikes compensation

Modi at the launch of the Pradhan Mantri MUDRA Yojana in New Delhi Wednesday. (Express Photo by: Prem Nath Pandey)

Taking a significant step that could help it counter Opposition criticism that it is insensitive to farmers, the government has hiked compensation amounts for crop loss due to natural disasters and relaxed eligibility norms for claiming relief.

Farmers can now avail of financial assistance if at least 33 per cent of their crop has been damaged by hailstorms, floods, cyclones, drought, pest attacks, cold wave/frost and other notified disasters — the current norm requires a minimum loss of 50 per cent.

The compensation in such cases — to be paid from the State Disaster Response Fund (SDRF) and National Disaster Response Fund (NDRF) — has been raised by 50 per cent or more.

“Since the country’s Independence, this is the first time a decision has been taken to make even farmers suffering one-third crop damage eligible for relief. And never before have compensation amounts been increased 1.5 times at one shot,” Prime Minister Narendra Modi said at a function to launch the Mudra Bank for microenterprises announced in this Budget. While the new norms technically apply from April 1, the new financial year, the Centre has decided to extend the benefits to farmers whose crops were damaged by hailstorms during February-March.

According to the new norms, farmers in rainfed areas will be eligible to claim assistance —- in the form of input subsidy —- of Rs 6,800 per hectare, compared to the current Rs 4,500.

Compensation for crops in areas with assured irrigation has been increased from Rs 9,000 to Rs 13,500 per hectare, and that for perennial (horticultural) crops from Rs 12,000 to 18,000 per hectare. The relief is subject to a cap of two hectares per farmer.

The states have also been asked to set aside 10 per cent of their SDRF funds for “local disasters” such as heavy rains and winds that normally do not qualify for assistance —- they had caused extensive water-logging and lodging of the rabi crop this time.

The timing of the announcement is significant, given the extent of the recent crop destruction from untimely rains and hailstorms. It also comes amidst the government’s efforts to secure passage of the controversial Land Acquisition Bill that has exposed the ruling coalition to criticism from a determined Congress-led Opposition.

Officials said that the stepped-up compensation and expanded eligibility would not put any extra burden on the exchequer. “The financial assistance is limited to 2 hectares per farmer, which means not more than 50 lh out of the total 85 lh would be covered. At an average of Rs 10,000 per hectare, the outgo will be only Rs 5,000 crore, whereas states have already received Rs 11,079 crore as SDRF money for 2015-16, “ an official said. The 14th Finance Commission has awarded Rs 61,219 crore to states towards SDRF for five years ending 2019-20.

Separately, the government has also announced relaxation of quality norms for procurement of wheat by government agencies in the 2015-16 rabi marketing season that has just begun.

The government will accept grains with up to 25 per cent lustre loss in Gujarat, with the ratio even higher at 40 per cent for the crop in Madhya Pradesh and 50 per cent in Rajasthan. The existing norms do not allow any loss of lustre.

Likewise, shrivelled and broken grains of up to 9 per cent have been allowed in Rajasthan and 10 per cent in Madhya Pradesh, as against the normal 6 per cent limit.

However, all other permissible limits for wheat procurement relating to foreign matter (0.75 per cent) and moisture content (14 per cent) have been retained.

Besides, the Reserve Bank of India has directed banks to restructure the loans of farmers whose crops have been damaged by the unseasonal rains and hailstorms.

Source:: Indian Express