New Delhi: Under the Narendra Modi government’s ambitious Pradhan Mantri Fasal Bima Yojna (PMFBY), huge disparities have been reported in the payment of claims and around 50% of the total dues are being paid only in 30-45 districts.
In addition, farmers’ dues amounting to more than Rs 5,000 crore are still unpaid, even though it is long past the deadline.
The information was obtained in response to an RTI query filed by The Wire as well as through a presentation in a conference in which state agriculture ministers participated in July this year.
According to the information, farmers had an estimated claim of a total of Rs 14,813 crore for the kharif season that ended in December 2018. Of this, only Rs 9,799 crore had been paid until July 2019.
However, according to the PMFBY guidelines, dues must be paid within two months from the end of harvest – which means the kharif season 2018 claims should have been paid by February 2019 at the latest.
The documents accessed state, “During the talks between state governments and insurance companies, it was informed that there is a lot of disparity in payment of claims and a total of nearly 50% claims have been paid in only 30-45 districts. Opinion has been sought from all stakeholders or parties to gather information about the districts where most claims are being paid.”
Ashish Bhutani, joint secretary in the Ministry of Agriculture and the CEO of PMFBY, said that he is investigating the matter together with the states and efforts are being made to understand why most payments are being made in these areas.
He told The Wire, “These areas are facing more crop loss. But it is happening quite frequently, we are trying to figure out the reason behind it.” The list includes Vidarbha and Marathwada in Maharashtra, along with districts in ten other states like Rajasthan, Madhya Pradesh and Andhra Pradesh.
On the question of irregularities in payment of dues, Bhutani said that the state government assesses crop losses. Therefore, it is not possible that an insurance company pays the claims of a particular area and not the rest.
In June, The Wire had reported on how insurance companies have missed the deadline to recognise and pay claims worth over Rs 5,000 crore made by farmers.
Crop insurance problems and their solutions
In a meeting with state agriculture ministers, the Ministry of Agriculture offered several solutions for problems hampering the proper implementation of the insurance scheme like making the scheme voluntary, estimating the yield through remote sensing, better use of the CCE app, and excluding high premium crops from its purview.
One of the challenges of crop insurance reported by the Ministry of Agriculture is the perception that the insurance companies are making money out of it.
The ministry said that certain districts have high premium crops due to which the total cost of PMFBY increases considerably. As a solution, it was suggested that high premium crops should be removed from the purview of the insurance scheme by kharif 2020. However, the states are yet to send their responses.
The ministry further said that due to the short-time contracts, the insurance companies are investing very little into providing information regarding the scheme or in resolving issues faced by farmers. Repeated tendering is making it extremely difficult to fully implement the crop insurance in states, it claimed.
The Union agriculture ministry said that the state governments are delaying the transfer of their share of subsidy due to which there is considerable delay in settlement of claims. The amount should be deducted from the funds given by the Centre to the states for this, it suggested.
Documents obtained by The Wire also reveal that the reach of the scheme in the north-eastern region is very low as there is no provision for identification of beneficiaries cultivating community-owned land under the scheme.
Meanwhile, loans can be made voluntary for farmers under the PMFBY. In its presentation, the ministry said, “Because of crop insurance being compulsory for farmers taking loans, there would anger among those farmers who either do not want to be insured or who have been covered without their consent.”
As The Wire has earlier reported farmers are miffed over the fact that they are being forcibly covered under the crop insurance scheme and a premium is being deducted from their accounts without their permission.
Difficulty in estimating crop loss
The agriculture ministry says that due to the delay in the estimation of crop losses, the claims of the farmers are not being paid on time. Crop cutting experiment (CCE) is carried out in order to get a proper and accurate estimate of the yield of major crops like rice, maize, millet, groundnut, sugarcane, cotton, wheat, barley, oilseeds, etc.
The agriculture ministry also said that it is very difficult to carry out 70 lakh CCEs every year in a short span of time. There is a shortage of manpower due to which payments of dues are being delayed.
It also claimed that the CCE app is being used quite less. Less than 15% of the total CCE is done through this app.
In this regard, it has been suggested to improve the National Crop Insurance Portal (NCIP) and link United Farmer Database (which contains land records in digital form) with it. It was also suggested to further improve the CCE app’s functioning.
It has been advised to use remote sensing in order to estimate the yield of major crops using remote sensing. The Maharashtra government is also working on a similar scheme under which the crop loss in an area will be ascertained so that the claim can be settled on its basis.
Bhutani said, “Earlier the insurance unit was at the tehsil and taluka level. Now, it has reached the village level. In this way, the number of CCEs has increased almost five times. It is not possible for several states to do it.”
He further said, “Its solution is in technology. If a scientific assessment is done, there will be no dispute and time will be saved. Payment will then be made within a month.”
Questions have been raised from time to time on the crop insurance schemes. Farmers and agricultural experts have expressed concern many times over faulty implementation of the scheme and for not resolving the grievances of the farmers.
Last year, The Wire reported that after the implementation of the PMFBY, the number of farmers covered by crop insurance has gone up by only 0.42%. On the other hand, the premiums paid to insurance companies have increased by 350%.
Translated from Hindi by Naushin Rehman. You can read the Hindi version here.