Leeway for farmers

Sushil Manav

Gurjeet Singh Mann, a progressive farmer from Kirpal Patti village of Sirsa, has been getting his crops covered under the Pradhan Mantri Fasal Bima Yojana (PMFBY) ever since it was launched in the kharif-2016 season. He says he had no choice so far, because the premium for the crop insurance is debited automatically by his bank from his account.

But he always wondered why he and other farmers like him had to pay premium for risks like drought and floods though there is no history of such calamities in the area where his fields are located.

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“Some farmers consider the premium paid on insurance a burden, particularly when it comes to rabi crops, because kharif crops like cotton are more prone to damage. But they had no choice as the PMFBY was mandatory for farmers who had taken crop loans from banks,” says Mann.

With the Union Cabinet approving the revamp of the PMFBY and the Restructured Weather-Based Crop Insurance Scheme (RWBCIS), Mann’s issues seem to have been addressed since now the farmers can even get their crops insured for a single peril, though it will be up to the state to choose one or more perils and individual farmers won’t have a say.

The biggest takeaway from the revamp is that the PMFBY has been made voluntary. Among the various parameters modified by the Cabinet, one major amendment is the allocation of business to insurance companies for three years under both these insurance schemes. Earlier, the insurance companies could get business for one particular year or even for a single crop.

Now, the states can choose the scale of finance or district-level value of the National Average Yield (NAY) MSP as sum insured for any district crop combination. The farm gate price is to be considered for crops for which the MSP is not declared.

The revamp has also limited the Central subsidy to 30 per cent for un-irrigated crops and 25 per cent for irrigated crops, with districts having more than 50 per cent irrigated area to be counted as irrigated.

For the estimation of crop loss claims, a two-step process is to be adopted based on the ‘deviation matrix’ using specific triggers like weather indicators, satellite indicators, etc. for each area along with normal ranges and deviation ranges. Only areas with deviations will be subject to Crop Cutting Experiments (CCEs) for assessment of yield loss under the PMFBY.

The amended scheme also provides for technological solutions like Smart Sampling Technique (SST) and the optimisation of the number of CCEs.

The scheme also provides that the Department of Agriculture, Cooperation and Farmers’ Welfare in consultation with other stakeholders/agencies will develop a state-specific, alternative risk mitigation programme for crops having a high rate of premium.

A separate scheme would be prepared to provide financial support and effective risk mitigation tools through crop insurance especially to 151 districts which are highly water-stressed, including 29 which are doubly stressed because of low income of farmers and drought. In case of non-provision of yield data beyond the cut-off date by the states to insurance companies, claims will be settled on the basis of yield arrived through the use of technological solutions.

These changes are proposed to be implemented from the kharif-2020 season throughout the country.

Sanjeev Kaushal, Additional Chief Secretary, Agriculture and Farmers’ Welfare Department, Haryana, says the revamp of the scheme will address the biggest grievance of the farmers that the banks insured their crops without their will. “During pre-Budget consultations with the CM, several MLAs had demanded that the PMFBY should be made optional,” he adds. Kaushal says allocating business to the insurance companies for three years will lower their overhead expenditure, which in turn, will help them lower the rates of premium.

“Earlier, too, the Haryana Government was negotiating well with the insurance companies on the issue of rate of premium. This reflects in the manner farmers in the state have benefited by getting more in claims that what the insurance companies were paid as premium,” claims Kaushal.

Ever since the PMFBY was launched in Haryana during the kharif-2016 season, Rs 1,672.03 crore was paid as premium to insurance firms by farmers, the state government and the Centre. Farmers got Rs 2,097.93 crore in claims for the loss of crops, almost 25 per cent more than the premium paid.

Dharam Sharma, a former consultant, PMFBY, in the Haryana Agriculture and Farmers’ Welfare Department, believes that making the scheme voluntary will see at least 70 per cent dip in the number of insurances under the scheme. “Of the 16 lakh farmers in the state, only 9 lakh loanee farmers are being covered under the PMFBY. Of the rest, hardly 12,000 are opting for the scheme on their own,” says Sharma.

He is also apprehensive that the three-year contract binding on insurance companies will restrict corrective measures and improvement in implementation.

Focus on sustainable production

Pradhan Mantri Fasal Bima Yojana aims at supporting sustainable production in the agriculture sector by way of:

• Providing financial support to farmers suffering crop loss/damage arising out of unforeseen events
• Stabilising income of farmers to ensure their continuance in farming
• Encouraging them to adopt innovative, modern agricultural practices
• Ensuring flow of credit to the agriculture sector which will contribute to food security, crop diversification and enhancing growth and competitiveness of the agriculture sector, besides protecting farmers from production risks.

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