Need for better crop cover for farmers

From Kharif season 2016, GOI introduced the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Re-structured Weather-based Crop Insurance Scheme (WBCIS) by replacing the existing National Agricultural Insurance Scheme (NAIS) and National Crop Insurance Programme (NCIP). Under the PMFBY, farmers have to pay uniform premium of 2% of sum insured for kharif, 1.5 % for rabi crops and 5% for commercial and horticultural crops.

Crop insurance is compulsory for loanee farmers and premium is deducted from the loan amount and optional for non-loanee farmers. Payment of insurance premium is subsidised to the farmers (over and above the farmers’ share) under the schemes, with GoI and the state governments concerned equally sharing the subsidy burden. Agricultural Insurance Company of India (AIC) is the implementing agency of the scheme.

Progress and coverage
Overall coverage of PMFBY is about 4 crore farmers in Kharif 2016-17 and 1.6 crore farmers during Rabi 2016-17, as against the 14 crore farmers in India. It indicates, under PMFBY only 29% of the farmers in kharif and just 11% of the farmers in rabi were covered. Despite full efforts by the Government of India, farmers’ participation continues to be low; particularly, coverage of non-loanee farmers and small and marginal farmers is very low.

Among the insured farmers, share of small and marginal farmers was just 10%, despite their share in total farmers being 80%. There is no mention of tenant farmers and share croppers. About 70% of the farmers are not aware of the scheme as per the recent CAG report on crop insurance.

Problems in implementation

Crop insurance is becoming more of a loan insurance to banks rather than crop insurance to farmers, as the sum insured is equal to loan amount rather than to the crop returns and participation of non-loanee farmers is meager. Also, delay in claims payments is delayed, sometimes exceeding three years. Although, there is an inbuilt monitoring mechanism for timely payments of the claims, it is non-functional.

Recent Centre for Science and Environment (CSE) report said that only 32% claims were paid out by insurance companies, although state governments had paid their part of premium. In addition, the Controller and Auditor General (CAG) report indicated that only 30% of the claims paid were backed by the utilisation certificates.

There was no auditing of accounts of the private crop insurance companies by the CAG since last several years. Grievance redressal systems for speedy settlement of farmer’s complaints at GoI and state government levels were inadequate.

Monitoring of PMFBY

Under the PMFBY scheme, State Level Coordination Committee on Crop Insurance (SLCCCI) of the concerned State is responsible for monitoring of the schemes in the State. However, a National Level Monitoring Committee (NLMC)will monitor the scheme at the national level. Timelines have been stipulated for various activities such as collection of individual insured farmer level data with requisite details within 15 days of close of the season.

States are required to submit yield data based on Crop Cutting Experiments (CCEs) within one month from the date of final harvest; transfer of claims by banks to beneficiary account within a week along with display of list of beneficiaries on the crop insurance web portal. At district level District Level Monitoring Committee needs to be established to oversee the implementation of the programme.

Non-loanee farmers

For non-loanee farmers, crop insurance is not compulsory and they have to pay premium before the stipulated date to avail facilities under PMFBY. Most of the farmers are unaware of the benefits under PMFBY, hence there is a need to popularise the scheme. Most of the non-loanee farmers are small and marginal farmers, tenant farmers and share croppers.

Given their low economic status, they are not willing to pay premium and opted out of crop insurance. Hence there is a need to reduce premium to just 1% in case of small and marginal farmers to increase their participation.

Way forward

Data base of the farmers needs to be maintained by the Government of India in PMFBY portal mentioning the dates of premium paid, claims and disbursal of the claims for concurrent monitoring of the scheme by local bodies, especially panchayat and gram sabha. Payments by the state governments to the private insurance companies should be in time after verification of records, so that the private companies will pay claims to farmers in time.

Utilisation certificates by insurance companies should be insisted by the state governments for release of funds, so that it will ensure guaranteed payments of claims to farmers in time. State agricultural extension system should be proactive in creating awareness about promoting the PMFBY to increase coverage especially non-loanee, small and marginal farmers and also tenant farmers.

It was noticed that deficiencies exist in crop cutting experiments and automatic weather stations which are the basis for the estimation of yields for claims. Amount of claims should be decided by using modern technology like satellite images in addition to the existing crop cutting experiments and weather data.

A separate monitoring and rapid assessment unit needs to be established at Central and state level by including elected representatives, agricultural officers, representatives of banks and crop insurance companies.

The CSE report estimated that the insurance companies, which made close to Rs 10,000 crore as 'gross profits' during Kharif 2016, have even failed to set up infrastructure for proper implementation of the PMFBY. There is a need for utilising these profits for infrastructure development in terms of better rain gauges and publicity campaign under CSR initiatives. (Writer is Director (M&E), National Institute of Agricultural Extension Management (MANAGE), Hyderabad)

By A Amarender Reddy