Centre justifies 90% decline in crop insurance payouts in state

Facing criticism over a steep decline in compensation payouts under the Pradhan Mantri Fasal Bima Yojana (PMFBY) in Haryana, the Union Ministry of Agriculture and Farmers’ Welfare has defended the figures, attributing them to the scheme’s area-based yield assessment methodology.

Fasal bima payouts

Year  Farmers' share    Centre's share    Claims paid

2020-21     ₹345 crore  ₹482.2 crore      ₹1,162.7 crore

2021-22     ₹313.8 crore      ₹447.7 crore      ₹1,649.6 crore

2022-23     ₹345 crore  ₹481.1 crore      ₹2,518.7 crore

2023-24     ₹154.9 crore      ₹246.6 crore      ₹265.2 crore

2024-25     ₹280.3 crore      ₹388.2 crore      ₹262.6 crore

(Note: Centre did not provide the state’s contribution figures.)

In a written reply to a question by Rohtak MP Deepender Hooda, Minister of State for Agriculture Ramnath Thakur confirmed that crop insurance payouts in the state plunged from Rs 2,518.66 crore in 2022-23 to Rs 265.23 crore in 2023-24, marking an 89.5% drop. The payouts further reduced to Rs 262.6 crore in 2024-25.

Thakur clarified that under PMFBY, “claims are worked out based on the shortfall in actual yield vis-à-vis threshold yield as submitted by the state government concerned and as per the formula in the operational guidelines of the scheme. Thus, the claims are dependent on the loss in yield due to natural calamities.”

On the dispute over cotton crop yield data in Bhiwani and Charkhi Dadri during the kharif 2023 season, Thakur said, “The State Level Technical Committee (STAC), Haryana, in its meeting on August 20, 2024, decided to obtain village-wise technical yield data from the Mahalanobis National Crop Forecasting Centre (MNCFC) and Haryana Space Application Centre (HARSAC), in accordance with clauses 19.5 to 19.7 of the scheme guidelines. These findings were accepted by both the state and the insurance company, and no appeals were made to the Central Technical Advisory Committee (CTAC).”

Responding to Hooda’s demand for details on premium contributions, the Minister said under PMFBY, farmers pay a minimal premium — 2% of sum insured for kharif crops, 1.5% for rabi crops, and 5% for commercial/horticultural crops. The balance premium is shared equally by the Centre and the state government.

Thakur also highlighted changes introduced under the 2023 guidelines. “New risk-sharing models like cup and cap (80:110), cup and cap (60:130) and profit and loss sharing have been introduced. In some cases, if claims remain below a threshold, part of the government’s subsidy returns to the state treasury. For high claims, both Centre and state bear the burden.”

He said remote sensing-based yield estimation now carries 30% weightage, with additional infrastructure like automatic weather stations and rain-gauges strengthening the scheme’s tech-based evaluation.

However, Deepender Hooda remained unconvinced. “A massive drop in the settlement of insurance claims could cause a financial crisis for farmers and erode their trust in the scheme. It appears the scheme now serves private insurers more than farmers.”

He accused the government of “turning PMFBY into a tool for filling private insurers’ coffers while denying rightful compensation to farmers.”

Thakur noted that states such as Andhra Pradesh, Bihar, Gujarat, Jharkhand, Telangana, and West Bengal had exited the scheme after initial implementation, though Andhra Pradesh and Jharkhand have now rejoined.