Chronicle of a scam foretold
Vishav Bharti
IN October 2018, while interacting with a group of farmers and students at Chandigarh’s Kisan Bhawan, renowned rural affairs expert P Sainath said Pradhan Mantri Fasal Bima Yojana (PMFBY) was ‘not fasal but a rascal yojana’.
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Citing examples from crisis-ridden districts of Maharashtra, he explained how the finance capital had waged a war on the peasantry of the country. It was good, he said, that Punjab’s farmers were still enjoying freedom as the ‘rascal deal’ was not being implemented in the state.
Many raised doubts over Sainath’s claims, but soon his words proved right when The Tribune, based on information obtained under the RTI Act by Haryana-based PP Kapoor, broke the story that insurance companies had made over Rs 15,795 crore profit from the PMFBY in just two years. The biggest beneficiaries were 13 (private) of the total 18 companies which got contracts under the crop insurance scheme.
Punjab’s argument for opting out of this scheme during the SAD-BJP rule in 2016 was high premium and the way an entire village was considered the basic unit instead of the individual farmer. The government was of the view that when farmers were already in crisis, they won’t be able to pay the high premium. Farmer organisations from Punjab refused to pay any premium. “Farmers are even unable to pay water and electricity bills, how can they pay such a high premium to the insurance companies?” says Balbir Singh Rajewal, president of a faction of the BKU. He was part of various meetings with the government regarding the implementation of the scheme in the state. The annual premium worked out to be Rs 1,250 for one acre of wheat and paddy, around Rs 5,000 (sugarcane) and about Rs 2,000 (cotton).
According to economists, the scheme was not in Punjab’s interests. “Punjab’s area is just 1.45 per cent of the total geographical area of the country, but it contributes 32 per cent wheat to the Central pool and is number three when it comes to paddy contribution. So, it is the Centre’s duty to bear the losses and pay premium to the companies as Punjab is overexploiting its natural resources for national food security,” says Gian Singh, an economist.
Sainath reveals the design behind the scheme: “First, the government demolished every system required to assess agrarian crisis: from rainfall measurement to crop insurance; from water distribution to crop damage assessment, everything is being privatised. Now they have replaced village-level assessment with tehsil-level assessment and the work has been given to a private company, which terribly failed in Maharashtra.”
“When you have demolished all existing tools to assess crop damage, how can you tell how much is the damage? It all suits insurance companies,” says Sainath.
Not just making high profits, the companies also did not pay complete claims to the farmers. “Insurance companies made thousands of crores of rupees, but failed to pay claims worth over Rs 2,800 crore to farmers in the same period,” says Ropar-based RTI activist Dinesh Chadha, who found that the estimated loss of crops of 3.01 crore farmers was to the tune of Rs 16,448 crore in 2016-17, but the firms approved Rs 16,242 crore for payment. “Eventually, they paid Rs 15,902 crore — Rs 546 crore less than the estimated crop loss of farmers,” he adds.
The scheme, he says, was tailor-made for insurance firms. “Now, the government has amended the scheme, but what about the thousands of crores of rupees pocketed by the companies?” asks Chadha.
