India's government on Wednesday approved a $1.3 billion insurance scheme for farmers to protect against crop failures, saying it was intended to put a halt to a spate of suicides.

Two successive years of drought have battered the country's already struggling rural heartland, with farmer suicides in rural areas regularly hitting the headlines.

Under the new scheme, farmers will pay premiums of as little as 1.5 percent of the value of their crops, allowing them to reclaim their full value in case of natural damage, the government said.

‘The scheme will be a protection shield against instances of farmer suicides because of crop failures or damage because of nature,’ Home Minister Rajnath Singh told reporters Wednesday after the cabinet approved the scheme.

Named the Prime Minister Crop Insurance Scheme, it is also an attempt by Narendra Modi's government to woo the country's powerful farming community after drubbings in two recent state elections.

‘This scheme not just retains the best features of past policies but also rectifies all previous shortcomings... This is a historic day,’ Modi said in a tweet.

Previous crop insurance schemes were criticised by the agricultural community as being too complex or for having caps that prevented them from recouping the full commercial value in the case of damage.

Take-up of existing schemes by farmers is as low as 23 percent, the Agriculture Minister Radha Mohan Singh said, adding that he hoped to increase coverage to 50 percent.

The heavily subsidised scheme will come into effect in April, a major crop-sowing season.

‘It frees Indian farmers from the fear of crop failure and is a strong political message from the government,’ Dr MJ Khan, Chairman of Indian Council of Food and Agriculture, told AFP.

Modi's government has also faced large-scale farmer protests over a key bill aimed at making it easier for businesses to buy land.