Government’s flagship ‘Prime Minister Fasal Bima Yojana (PMFBY)—crop insurance scheme was launched with a view to benefit maximum number of farmers in the country. However, number of beneficiaries under the scheme has come down drastically in last two years.
According to information from the ministry of agriculture, number of farmer applicants covered under the scheme reduced by about 85 lakh between the year 2016-17 and 2017-18. Total numbers of farmer applicants covered under the scheme in the year 2016-17 was about 5.72 crore which came down to 4.87 crore in the next financial year 2017-18.
Experts claimed that the crop insurance scheme is not showing desired results. Devinder Sharma, Agriculture expert said, “There are many issues. Delay in getting claims or compensation and getting paltry claims are some of the main reasons. There have been many instances farmers are not getting adequate claims on time. There have been many cases wherein farmers have got compensation like Rs 4 or Rs 10 or amount like that. I don’t understand this. How this could be possible. This looks like a scam and government needs to take some corrective measures.”
An official of the ministry of agriculture said that government has been urging the States to bring more areas and crops under the scheme so that maximum farmers may be covered under the scheme. Besides that Government seeks active involvement of all stakeholders especially States and implementing insurance companies for conduct of publicity campaign including organization of camps in the rural areas to build farmer awareness about crop insurance schemes.
However, the ministry official claimed the main reasons behind the reduction in number of farmers in last two years are the announcement of debt waiver Scheme in Maharashtra and Uttar Pradesh. “Farmer’s perception of mitigated risk in 2017-18, which was a good monsoon year, deduplication due to Aadhaar being made mandatory for coverage are also some of the reasons,” added the official.
Launched in April 2016, the PMFBY provides comprehensive crop insurance from pre-sowing to post harvest against non-preventable natural risks at extremely low maximum premium rate of 2 per cent for Kharif crops, 1.5 per cent for Rabi Crop and 5 per cent payable by farmers for annual commercial or horticultural crops. The balance of actuarial premium is shared by the Central and state governments.
Amidst the reports of delay in settling farmers’ insurance claims under the scheme, the ministry recently announced some changes to the scheme to help the farmers with crop loss to receive their insurance claims on time. Union Agriculture Minister Radha Mohan Singh during question hour in the Lok Sabha during the ongoing monsoon session said that those insurance companies which fail to clear claims of farmers for crop loss within two months, will have to repay with 12 per cent interest. The minister added that the state governments will also have to pay the same rate of interest to farmers if they delay the contribution of their share.
Moreover, insurance companies have also been asked to utilize 0.5% of gross premium collected by them for publicity and awareness generation.
Officials said that the PMFBY scheme involves several stakeholders including State Governments, financial institutions, insurance companies and farmers. It also envisages adoption of technology for integration of all stakeholders on the National Crop Insurance Portal for scheme administration and in capturing crop loss assessment.
The scheme provides for setting up of Technical Support Unit (TSU) with crop insurance expert to track and evaluate the scheme implementation. Initially, the Agriculture Insurance company of India Ltd. (AIC) and subsequently the GIC Re were designated as TSU. Government has recently engaged a team from United Nations Development Programme (UNDP) to set up Project Monitoring Unit (PMF)/TSU.
Crop Insurance Scheme (PMFBY)
Funds allocated
2016-17: Rs 11054.63 crore
2017-18: Rs 9419.79 crore
Farmer applicants covered (PMFBY)
2016-17: 5,72,49,843
2017-18: 4,87,49,066
Some main states under the scheme and farmer applicants covered
| States | 2016-17 | 2017-18 |
| Chattisgarh | 1,549,139 | 1,471,587 |
| Bihar | 2,714,270 | 2,234,483 |
| Gujarat | 1,975,139 | 1,754,470 |
| Haryana | 1,336,028 | 1,335,764 |
| Karnataka | 2,737,667 | 1,601,511 |
| Kerala | 77,405 | 46,136 |
| Madhya Pradesh | 7,181,316 | 6,890,930 |
| Maharashtra | 12,001,215 | 10,053,750 |
| Rajasthan | 9,150,224 | 6,012,084 |
| Utter Pradesh | 6,767,276 | 5,290,261 |