‘Crop Insurance Scheme is poorly designed and badly implemented’


    What is going wrong with the Pradhan Mantri Fasal Bima Yojna ?

    I have been traveling to rural areas, especially drought-hit villages since last two years. Recently, I visited Mandsaur (Madhya Pradesh), Gujarat and Rajasthan. In every village, I asked farmers about PMFBY and shockingly in a village out of 100 farmers only 2-3 farmers were aware about the Scheme. There are three categories- first, farmers totally unaware about the scheme, second there were some lonee farmers who said some money was detected as premium from their Kisan Credit Card (KCC) and third farmer activists who were aware about the Scheme. So, awareness about the Scheme was very low among farmers which undermines its efficacy. Apart from lack of awareness, farmers are not getting adequate claims timely. So delays in assessments and payments of claims, lack of proper monitoring make the Scheme ineffective. I would say PMFBY is poorly designed and badly implemented.

    PMFBY was introduced to overcome problems faced with earlier insurance schemes. Do you think new Scheme would also be not able to achieve desired goals?

    PMFBY is nothing but the latest version of the various agriculture insurance schemes that the government has been trying to implement in the last 30 years. The problem with the Fasal Bima Yojana is, like every of its predecessors, it covers less than one quarter of the farmers.The latest data of Fasal Bima Yojana shows that its coverage is only 30 percent and that too because farmers have been forced into it. Any farmer who takes loan against a Kisan Credit Card is asked to be insured under Fasal Bima Yojana. Non-lonee farmers are still out of coverage. At least 70 percent of the farmers are not covered under the scheme. Moreover, it does not cover all the crops. We need a scheme that covers all farmers and all crops against all forms of losses. Latest CAG Report clearly pointed out loopholes in the assessment and monitoring systems.

    Premiums have been kept low. Would that help?

    Unless the long standing demands of farmers are not addressed comprehensively, the PMFBY is not going to lead to improved coverage or mitigation of farm distress, because reduction in premium rates will not be a silver bullet to achieve this.

    It is widely reported that the insurance companies collected huge premium from the farmers and paid much less claims. Is that signaling towards a big scam?

    As I said earlier, the Scheme is poorly designed. Insurance companies including public sector companies got nearly Rs 10,000 crore in its kitty. Going by official data, total premium collected during Kharif 2016 was nearly Rs 16,000 crore and claims paid by them was nearly 23 percent of total claim made. Nearly 77 percent profit certainly signals towards scam. Facing tough times for agriculture since 2011, Tamil Nadu presents even more pathetic condition, for Rabi 2016-17, the farmers’ claim amount to Rs 954 crore and so far the only Rs 22 crore worth claims have been paid! We find that for PMFBY, the Centre’s and State governments’ expenditure went up by four times whereas coverage increased only by 30 percent! The insurance premium is being deducted without the farmers’ knowledge, consent and information and when there is crop loss, the same yield based assessment arbitrarily decided by Patwaris. Farmers are left at the merciless mercy of the administration while the insurance companies laugh all the way to the bank.

    What needs to be done to support farmers?

    We have been demanding a comprehensive relief-cum-insurance scheme that is universal in its coverage (all farmers, all crops, all forms of damage and at every stage of crop cycle), affordable for the farmers, offers adequate amount of compensation, has quick and simple ways of assessing crop damage and is free of corruption and hassle in the delivery of the insurance amount. On these counts, PMFBY, fails to meet most expectations.

    Facing an agrarian crisis, the Indian farmer desperately needs state support in the form of relief, compensation and insurance payment. Therefore, PMFBY needs to be modified as  a comprehensive relief-cum-insurance scheme that would universal in its coverage.



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