The Standing Committee on Finance, headed by senior Congress leader M Veerappa Moily also recommended that a suitable "fool-proof mechanism/scheme should be put in place to provide complete financial protection to farmers including social security".
The report was tabled in Parliament on Friday.
An amount of Rs 13,000 crore has been allocated for the interest subvention for crop loans in the Budget Estimates of 2015-16.
The Finance Ministry informed the panel that as per the assessment of financial implication of interest subvention for the year 2014-15, the total subvention including post-harvest storage is estimated to be Rs 18,904 crore as against Rs 15,649 crore in 2013-14.
The budget provision for 2015-16 will be utilised for reimbursing the claims raised during the period 2012 to 2014 as well as during 2015-16, if any.
When the panel pointed out extent of under allocation, particularly when unseasonal rains have wreaked havoc causing extensive damage to crops, the Ministry have conceded that additional provision of about Rs 15,000 crore may be required, depending upon actual claims received.
"The Committee, would, therefore urge the Ministry to make sufficient additional allocations under this head so that farmers are adequately protected against vagaries of nature. More so, when this year, nature has been very unkind to the farming community," the report said.
The report highlighted the underlying problem of wholly inadequate crop insurance system available for the hapless farmers.
The existing weather and yield-based systems take only the area and not the individual as a unit, it noted.
"This approach does not seem to represent and address the manner in which crop damage actually occurs," it said.
Recently, the RBI had said a new scheme for interest subvention for farmers is being worked out though it may take "some time".
The earlier interest subvention scheme will continue till June 30, it said.

Latest News from India News Desk