Companies reap profits while farmers get pittance

Vijayawada: The crop insurance schemes introduced by the Central government, projected as a safety net for farmers facing natural calamities, have instead become a source of windfall profits for private insurance companies. Data from the past three years reveals a shocking imbalance, while insurance firms collected nearly Rs 5,850 crore in premiums, the compensation paid to farmers amounts to a mere Rs 930 crore. This means that 85 per cent of the funds went into corporate coffers rather than reaching the distressed cultivators.

Under both the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Weather-Based Insurance Schemes, farmers from the state, along with the state and Central governments, contributed large sums since the 2022 kharif season to the 2024 rabi. Yet, despite natural disasters such as cyclones, floods and droughts during this period, the compAensation flow to farmers has been negligible. Out of Rs 1,567 crore collected under weather insurance alone, not a single rupee was paid to any farmer.

When the YSRCP government came to power in 2019, it initially replaced the Central scheme with a free crop insurance model, which directly benefited farmers without intermediaries.

However, after pressure from the Centre, the State rejoined the Central insurance programmes from the 2022 Kharif. Since then, private companies have regained control—marking the return of old problems like delayed settlements, rejected claims, and massive profit accumulation.

Participation figures further expose the disparity. In 2022 kharif, 25.28 lakh farmers enrolled, but only 3.43 lakh received compensation, while in rabi 64,000 farmers received insurance out of 15.22 lakh enrolled. In Kharif 2023, 98,000 farmers got claims out of 22.68 lakh insured, and in rabi that year, 1.43 lakh people out of 12.92 lakh people got compensation. Even after the TDP-led NDA coalition government promised free crop insurance in kharif 2024, only 82,000 farmers received a meagre Rs 8.53 crore in compensation.

In contrast, under the Weather-Based Insurance Scheme, crores in premiums were collected in multiple seasons — 2023 kharif, 2023 Rabi, 2024 Kharif and 2024 rabi — but not a single claim has been settled so far. These figures paint a grim picture: crop insurance, instead of being a shield for the farmer, has become a lucrative avenue for private companies, leaving the food producers of the nation empty-handed.

P Jamalaiah, state general secretary of the Andhra Pradesh Koulu Rythula (Tenant Farmers) Association, told 'The Hans India' that the government must ensure prompt insurance payments to farmers affected by natural calamities. He criticised successive governments for neglecting farmers’ interests and allowing insurance companies to impose harsh conditions.

Jamalaiah urged that during cyclones and disasters, the government should personally intervene to guarantee compensation for farmers’ crop losses without bureaucratic delays.