Bhopal, Feb 18 (IANS): Prime Minister Narendra Modi on Thursday said that the crop insurance scheme launched by his government last month will be a panacea for all problems faced by the farmers.

"Farmers did not believe in the crop insurance policies of the previous United Progressive Alliance government. It is the main reason that not even 20 percent farmers in the country opted for crop insurance. We have now come up with this scheme keeping in mind the lack of interest among farmers," Modi said at a farmers' rally in Sherpur in Sihore district of Madhya Pradesh.

Taking a dig at the previous UPA government at the Centre, the prime minister said that the earlier insurance schemes benefitted the companies and not farmers. He said the new crop insurance scheme will definitely benefit the farmers in the country.

The union cabinet in January gave its nod to the new 'Pradhan Mantri Fasal Bima Yojana' (Prime Minister's Crop Insurance Scheme), in which premiums are as low as 1.5 percent. 

A uniform premium of two percent of the sum insured will be charged from farmers for all kharif crops and 1.5 percent for rabi crops. The annual premium for horticultural crops will be five percent of the sum insured. The remaining insurance premium will be given by the government.