Maharashtra announces Rs 31,628 crore relief for flood-hit farmers — the largest in its history.
Activists allege only Rs 6,500 crore will reach farmers directly.
Revised insurance norms remove key safeguards and individual claims.
Farmers now must pay their own premiums.
Crop loss compensation based on collective yields leaves many without payouts.
The Maharashtra government’s relief package announced recently for farmers hit by recent floods — hailed as the largest in the state’s history — has drawn sharp criticism from farmer unions, who say revised crop insurance rules have stripped away critical protections and left many cultivators uncovered.
The state government on October 7, 2025 announced a compensation package worth Rs 31,628 crore for farmers affected by the devastating floods that hit large parts of the state between August and September.
The floods, which struck even the traditionally drought-prone regions, damaged farmland across 29 of Maharashtra’s 36 districts — an estimated 6.8 million hectares. Nearly 60,000 hectares of agricultural land were completely washed away, along with the topsoil.
Chief Minister Devendra Fadnavis described the relief package as the “historic and highest” disbursal of compensation in the state’s history. Of the total amount, Rs 17,675 crore will go towards crop compensation.
Under the scheme, farmers practising rain-fed agriculture will receive Rs 18,500 per hectare, while horticulture farmers will get Rs 32,500 per hectare. Those who have completely lost cultivable land will be provided Rs 47,000 per hectare, plus an additional Rs 3.5 lakh through the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for restoration work.
The package also includes assistance for soil erosion, medical treatment of the injured, ex-gratia payments to the next of kin of the deceased and compensation for damage to houses, shops and cattle sheds.
However, farmer groups said the announcement masks serious flaws. This financial aid comes in the same year that the state government revised the norms for farmers that were earlier registered under the central scheme Pradhan Mantri Fasal Bima Yojana (PMFBY) — a move they claim strips away critical protections.
Maharashtra had launched its own crop insurance scheme in 2023, allowing farmers to insure crops for just Rs 1 against natural calamities. But in early 2025, citing irregularities and fraudulent claims, the government revised the rules — removing key safeguards.
According to government data, Maharashtra has the second-highest number of farmers enrolled under the PMFBY, with more than 36 million registrations.
Rajan Kshirsagar, state president of the All India Kisan Sabha (AIKS), said the revisions removed protections for pre-sowing losses, extreme weather during the season and crop damage from diseases or natural disasters during harvest. “Such a complex and impractical methodology does not provide justice to farmers. The state government is shedding its responsibilities and shifting the onus to insurance companies,” he said.
Under the new rules, only post-harvest losses in yield recorded through Crop Cutting Experiments (CCE) are covered. Individual claims are no longer recognised; instead, assessments are done at the level of a revenue circle.
Three levels of indemnity have been set, 70 per cent, 80 per cent and 90 per cent, depending on crop risk. Loss assessment and compensation now apply to clusters of affected farms, with claims settled collectively.
The official norms define a “Threshold Yield” (TY) — the benchmark yield at which insurance protection begins. This is calculated based on the average yield of the past seven years (excluding two years of declared calamities) multiplied by the area’s indemnity level.
“To simplify, if a cluster’s threshold yield is 100 quintals and the actual yield this season is 70 quintals, farmers at a 70 per cent indemnity level won’t receive any payout, since the 30 per cent loss falls below the coverage threshold,” explained Ajit Nawale, national joint secretary of AIKS. “If the yield drops to 60 quintals, they’ll only be compensated for 10 quintals — still losing 40 quintals without any relief.”
Farmer leaders argue this formula leaves many without help despite severe losses.
Another change requires farmers to now pay their share of the insurance premium, a cost the state government previously covered. Farmers are effectively left uninsured even after paying premiums, Kshirsagar pointed out. “These provisions make the crop insurance scheme ineffective and redundant,” he said.
AIKS president Ashok Dhavale said that while the government announced Rs 31,628 crore, only Rs 6,500 crore is actually being disbursed directly to farmers as Rs 10,000 per hectare. “The rest is drawn from other budget allocations pre-determined before the disaster, such as the National Disaster Relief Fund and pre-approved MGNREGS allocations,” he said.
Dhavale added that Rs 5,000 crore is routed through insurance companies, which cover all registered farmers, not just those affected by the floods. The remaining funds, he noted, are earmarked for infrastructure repair such as damaged barrages and will come from departmental budgets already set for 2025-26.
Farmer groups are demanding the restoration of old insurance provisions and higher compensation. “We need at least Rs 50,000 per hectare — the current rate doesn’t even cover sowing costs,” said Appa Shinde, a farmer from Beed district. “We need support like the farmers of Punjab to regain stability and start cultivating again.”