The Union Cabinet of India has approved the creation of the Fund for Innovation and Technology (FIAT), with a budget allocation of INR824.77 crore (approximately US$96 million) aimed at technological advancements in crop insurance schemes. This fund will support initiatives such as the Yield Estimation System using Technology (YES-TECH) and the Weather Information and Network Data System (WINDS).
Fund for Innovation and Technology (FIAT)
The establishment of the Fund for Innovation and Technology (FIAT), aims to enhance the technological infrastructure of the schemes, improving transparency, accuracy, and efficiency in claim calculations and settlements. Under Fund for Innovation and Technology (FIAT), two technological initiatives will be implemented:
YES-TECH (Yield Estimation System using Technology) leverages remote sensing technology for crop yield estimation, assigning at least 30% weightage to technology-based data. Currently operational in nine major states, including Andhra Pradesh, Assam, Haryana, Uttar Pradesh, Madhya Pradesh, Maharashtra, Odisha, Tamil Nadu, and Karnataka, YES-TECH aims to phase out traditional Crop Cutting Experiments (CCE). Madhya Pradesh has already adopted a fully technology-based yield estimation approach, which was utilized for claim calculations and settlements in 2023-24.
WINDS (Weather Information and Network Data System) focuses on expanding weather data networks through Automatic Weather Stations (AWS) at the block level and Automatic Rain Gauges (ARGs) at the panchayat level. This initiative aims to achieve a fivefold increase in network density to provide hyper-local weather data. While implementation was initially slated for 2023-24, preparatory requirements caused delays, and the program will now begin in 2024-25. The central and state governments will only incur data rental costs for this initiative. Nine states, including Kerala, Uttar Pradesh, Himachal Pradesh, Puducherry, Assam, Odisha, Karnataka, Uttarakhand, and Rajasthan, are in the process of adopting WINDS, with others expressing interest.
Extension of Pradhan Mantri Fasal Bima Yojana and RWBCIS
In addition to the Fund for Innovation and Technology, the Cabinet has approved the continuation of the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS) until 2025-26. This decision involves a total budget allocation of INR69,515.71 crore, covering the period from 2021-22 to 2025-26. These schemes aim to provide risk coverage for crops against non-preventable natural calamities, with efforts to enhance transparency in claim calculation and settlement through technology-driven initiatives under FIAT.
Special provisions have been made to prioritize farmers in northeastern states, where the central government covers 90% of the premium subsidy. Flexibility has been granted to reallocate unused funds to other development projects in these states, addressing the low gross cropped area and voluntary nature of the scheme in the region.
Special Package for Diammonium Phosphate Extended
To ensure the continued affordability of diammonium phosphate (DAP) for farmers, the Union Cabinet has extended the one-time special package under the Nutrient Based Subsidy (NBS) policy until December 31, 2025. This extension will require an additional budget of INR3,850 crore for the period from January 1, 2025, to December 31, 2025.
Fertilizer companies will continue to fix prices based on a fixed subsidy, and payments will be made based on actual point-of-sale (PoS) sales during the extended period. The extension builds on a previous approval for the special package until December 31, 2024, ensuring DAP remains accessible to farmers.
MoU with Indonesia on Rice Trade
In a move to strengthen trade relations, the Cabinet approved a Memorandum of Understanding (MoU) for the trade of one million metric tonnes of non-basmati white rice annually between India and Indonesia. This agreement, which is valid for four years and extendable for another four, will be implemented by the National Cooperative Exports Limited (NCEL), authorized by the Ministry of Cooperation.
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The MoU aims to address trade imbalances and foster economic ties between the two nations. NCEL, a cooperative society established under the Multi-State Cooperative Societies Act, 2002, will source rice through a transparent tendering process and cooperative societies, ensuring market stability.
Comprehensive Focus on Farmers
Union Minister for Rural Development, Agriculture, and Farmers Welfare, Shivraj Singh Chouhan, emphasized the Cabinet’s commitment to farmers during a press conference. He expressed gratitude to Prime Minister Narendra Modi, stating that the new year is dedicated to improving farmers’ welfare and achieving the vision of a developed India.
The minister highlighted that the government has set specific targets for the Ministry of Agriculture and Farmers Welfare over the next month to ensure timely implementation of these decisions. He acknowledged past challenges, such as delays in state contributions to the crop insurance scheme, and affirmed the central government’s proactive measures to address these issues.
By introducing the Fund for Innovation and Technology (FIAT), extending the Pradhan Mantri Fasal Bima Yojana and RWBCIS, implementing a special package for Diammonium Phosphate, and signing an MoU with Indonesia on rice trade, the Cabinet aims to safeguard farmers’ interests, improve agricultural sustainability, and strengthen international trade partnerships.
