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Recently the Centre has decided to reduce its subsidy share in the case of high premium crops in PMFBY


  • The scheme, which has so far been mandatory for farmers with crop loans, is becoming optional from April and is expected to see a 30% drop in enrolment
  • Centre had capped its subsidy for premium rates up to 30% for unirrigated crops and 25% for irrigated areas and crops.
  • This means that so long as the premium for a crop in a particular district is below the cut-off figure of 30%, the Centre will equally split the subsidy burden with the State.
  • If the premium is above 30%, the State will have to pay the entire additional amount
  • The other reason for high premiums may be that the crop is simply not viable in that area, in which case also insurance schemes are unsustainable

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