More Than a Year After Crop Failure, Maharashtra Farmers Still Wait for Insurance Payout

For many farmers, the compensation they received is substantially less than the premium they paid.

Parbhani (Maharashtra): “If even one rupee owed to one farmer is not paid, then the government will pay that money and recover it from the (insurance) company,” said Maharashtra chief minister Devendra Fadnavis while addressing an rally ahead of the 2019 Lok Sabha elections.

He was referring to the Prime Minister’s Crop Insurance Scheme (Pradhan Mantri Fasal Bima Yojana), or Pradhan Mantri Pik Vima Yojana (PMPVY) as it is called in Maharashtra. The rally was held in Pathri taluka of Parbhani district in central Maharashtra’s Marathwada region on April 12, 2019 – six days before the Parbhani Lok Sabha constituency went to polls on April 18, 2019.

Just 40 km away, Dinesh Khawale stood brooding on his two-acre jowar farm in Borwand village. All of his jowar plants had wilted and not borne any grains. An empty irrigation canal around 7 km away pointed to the grave farm crisis. “Ninety percent of farms in our village were left uncultivated in the rabi season,” said Khawale, adding that despite this, their village had not received any insurance compensation in the last two years.

With nearly half of Maharashtra reeling under drought, Rs 4,909.51 crore of government aid has been released to assist individual farmers. But, despite four times that amount – Rs 19,063.31 crore – being insured under the PMPVY for crop losses in kharif 2018, this compensation is yet to be fully disbursed. The deadline to compensation farmers, except for tur, ended on March 21, 2019, as per state government guidelines.

Two key PMPVY provisions of advance compensation – ‘prevented sowing or failed germination’ and ‘mid-season adversity’ – designed to provide immediate relief to farmers, have also not been implemented.

Farmers’ experiences and documents obtained about PMPVY implementation in Parbhani reveal a track record that debunks Fadnavis’s assurances about the government keeping a check on insurance firms and providing compensation.

A canal in Parbhani taluka and district carries no water. It is connected to the Jayakwadi dam located in Aurangabad district and was constructed to supply water to villages nearby. Parbhani farmers have been demanding that water be released in this canal to meet their needs.

On January 14, 2019, a notification invoking the ‘prevented sowing’ provision in Parbhani taluka was issued by the collector, P. Siva Sankar. “Bharti AXA General Insurance Company Limited is ordered to pay 25 per cent of the amount of insurance cover to insured farmers for the notified crop of (unirrigated) rabi jowar,” it stated. Bharti AXA General Insurance has been appointed to implement the PMPVY in Parbhani district for rabi 2018-19.

A notification for mid-season adversity was also put into effect by Sankar on February 11, 2019, for the remaining eight talukas of Parbhani.

“Due to drought conditions and breaks in monsoon, the yield of (unirrigated) rabi jowar is expected to fall below 50 per cent of its average production,” it read. Bharti AXA General Insurance was instructed yet again to pay 25% of the insured sum to jowar farmers in advance.

However, compensation sums are yet to be calculated by the firm, even though state guidelines mandate that the payment be made within 37 days of the district collector’s notification.

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In an email response to The Wire‘s queries, Bharti AXA General Insurance Company Limited said: “We have received the two notifications invoking prevented sowing and mid-season adversity clauses. We have already communicated our views to the district administration and the state authorities.” It neither elaborated on the contents of its views nor responded to our query on the time frame being followed for compensating farmers.

Sankar confirmed that implementation was stuck in correspondence. “The company has raised an objection over this parallel method of compensation to the Crop Cutting Experiment (CCE)-based method. So, we have sent the matter to the state government for further guidance,” he said. CCEs are yield estimation exercises conducted for each crop by the state agriculture department towards the end of the season, based on which villages are shortlisted for insurance compensation.

In the preceding season of kharif 2018 too, the mid-season adversity provision for tur was implemented in Parbhani after a long spell of protests.

Data obtained through a Right to Information application also show how only 54 of the over 2,000 revenue circles in the state received advance compensation since kharif 2016.

In addition, irregularities have also been cited by farmers in the final compensation they received at the end of the cropping season, after harvest.

Drought shrugged off in final claim payments, amounts reduced

Sri Ram Jadhav, 34, was expecting more than 50 quintals of soybean in kharif 2017 from his 4.5-acre farm in Ghewanda village of Parbhani district’s Jintur taluka. But scant rainfall reduced the yield to 30 quintals. “I had paid Rs 800 as premium but received less than that – Rs 250 – as compensation,” said Jadhav. He had suffered losses of around Rs 56,000.

Such cases of claim payments being lower than the premiums collected for kharif 2017 were also reported from Beed and Osmanabad districts. A scheme provision called the Area Correction Factor could have been the reason behind such compensation cutbacks.

As per the RTI data, Rs 2854.59 crore was withheld by applying the ‘area correction factor’ (ACF) in 28 districts between 2016 and 2018. Introduced to address excess insurance coverage, the Area Correction Factor is applied when some farmers in a revenue circle who are insured for a particular crop switch to another crop at sowing time.

However, this provision has been widely opposed. Farmers in Madhya Pradesh have filed  a complaint in the district consumer court against it. Agriculture researchers have called for abolishing and replacing it with mandatory physical inspection by insurance firms so the actual sown crop is insured.

The provision was also panned by a 2014 committee set up by the Union agriculture ministry to review the implementation of crop insurance schemes in India. “It is appropriate to use technology to address the chronic problem of area discrepancy, instead of the area-correction factor, which is iniquitous and unfair to honest farmers,” its report had stated. Yet, five years on, the provision continues to be in practice.

Aside from this, Parbhani’s drought-affected Palam taluka has been completely excluded from the final claims report prepared by IFFCO Tokio General Insurance Company Limited for kharif 2018. IFFCO Tokio General Insurance has been appointed in Parbhani to execute the PMPVY that season. CCE-based yield in Palam is higher than its threshold yield (derived out of past seven years’ CCE-based yield), making farmers ineligible for insurance compensation.

Several questions have also been raised in the way CCEs are conducted by the state agriculture department, depriving many farmers of their entitled insurance compensation. The case of Borwand farmers who were denied compensation for kharif 2017 illustrates this.

Flawed yield estimation and a prolonged struggle

Despite the soybean crop yielding a meagre 0.5 quintal per acre for most Borwand farmers in kharif 2017, the CCE report of Singnapur revenue circle, under which Borwand falls, recorded the yield as 5.6 quintals. Copies of Parbhani taluka’s CCE reports obtained by the All India Kisan Sabha (AIKS) showed that entries made in them were overwritten. Some reports were also submitted without the mandated approval of village-level committees that are set up to review CCEs.

After an agitation was held by farmers in June-July 2018 outside the Parbhani collectorate, the district superintending agriculture officer cancelled the CCE conducted for Singnapur.

For more than a year, farmers from Borwand village in Parbhani taluka and district have been following up on their rejected insurance claims with government authorities at all levels, including chief minister Devendra Fadnavis. But despite Fadnavis’s written assurance, their compensation for kharif 2017 has not been paid.

“We were told that the insurance company was instructed to disburse compensation based on the neighbouring taluka’s CCE,” said AIKS’s Vilas Babar. But no compensation was paid.

Thereafter, in a meeting on February 17, 2019, before the second kisan long march, Fadnavis issued instructions to the state agriculture secretary to look into the matter. Still, a year and five protest marches on, compensation remains unpaid.

While they wait for kharif 2017 compensation, deadlines for payment of kharif 2018 compensation have also been flouted. “We are in the process of settling claims. It will be completed by April-end,” said Eknath Dawale, principal secretary, state agriculture department.

All images by Poorvi Kulkarni.

Poorvi Kulkarni is a Mumbai-based journalist.