Under the scheme, land holdings irrespective of size, and upto 150 per cent of the average annual income of the farmer can be insured, chief minister Narayan Rane announced on Tuesday at a weekly press conference after a state cabinet meeting.

Rane said the scheme will be effective for a period of three years from the beginning of rabi season from October 1 this year and added that the government will bear an additional burden of Rs 36.98 crore to implement the scheme for both rabi and kharif seasons.

The scheme will be compulsory for indebted farmers, while it will be voluntary for others, he said adding that the crops to be insured under the scheme include cereals, grains as well as potato, sugar cane, and cotton for the first year while cash crops will be insured for the subsequentyears.

The state government will contribute its share amount of Rs 17.10 crore in the corpus fund of the central government and its insurance share of Rs 4.50 crore to be given to the insurance company. Thus the state government has decided to allot a total of Rs 21.60 crore to the insurance company this year. Provision for this amount would be made from the state contingency fund for this year.

Under this scheme, a 50-per cent grant would be given to small and fragmented land-holding farmers. The state government would press for the payment of compensation of 1/3 instead of 50 per cent while the centre's share would be 2/3.

The instalment rate of the insurance will be 2.5 per cent for cereals, 2.5 per cent for the kharif crop, 1.5 per cent for wheat and two per cent for the rabi crop, Rane said adding that the rates will be decided by the Union government.

Rane said that a 50-per cent grant in the instalment share will be alloted to farmers below the poverty line. However, the insurance company willbe responsible to pay the insured amount in case of damage to crops.

He said that the risk factor for the insured crop will be fixed in the percentage of 90, 80 and 60.

The government has decided to form a state-level crop insurance committee comprising secretary (planning), secretary (finance), secretary (revenue), representatives of the Reserve Bank of India, Maharashtra State Cooperative Bank and Nabard and state cooperation commissioner.