Mukesh Mathrani | Mar 24, 2019 | 5 min read
PM crop insurance scheme benefiting company rather farmers
Barmer: Border district of Barmer in Rajasthan has been perennially drought hit for the last 10 years. At a time when lack of rainfall has left fields dry and crops wasted, government schemes launched with tall promises of covering farmers’ expenditure in such situations haven’t yielded much for the farmers. Rather, it is the insurance firms that are benefiting from schemes such as the ambitious Pradhan Mantri Fasal Bima Yojna (PMFBY- PM’s crop insurance scheme). Insurance firms in Barmer have made gains of more than Rs 120 crore through this scheme since 2017-18 according to officials of agriculture department.
As per the provisions of PM crop insurance scheme, a farmer has to pay only two percent of total premium amount, while the state and Central governments bear 50-50 percent of the rest of the amount. In Barmer, 4,03,637 farmers were covered under the scheme. Including farmers’ share of Rs 20.69 cr (at two percent), state and Central governments had paid Rs 378.79 cr to the insurance company, Tata AIG Pvt Ltd. Based on the crop assessment report, when the district administration submitted to the insurance firm claims worth Rs 1,034.36 crore, it offered to pay up only 25 percent of the claims amounting to Rs 258.59 cr, which is Rs 120.20 cr less than the premium paid to the company under PMFBY.
Tall claims fall flat
PMFBY was launched with tall claims in 2015, promising farmers economical cover even in case of bad monsoon or crop damage. Drought situation in Barmer is so severe that 2,694 of total 2775 villages in the district have been declared drought hit by the state government in its crop assessment report submitted to the Centre. The report also claims that crops on 12,66,418 hectare land of the total cultivated area of 15,18,190 hectare were damaged due to erratic monsoons.
According to official data with the Agriculture department, this year Bajra was sown on 8,80,609 hectare, moth and mung (pulses) were sown on 3,04,910 hectare, gwar on 2,95,661 hectare and groundnuts were sown on 3,478 hectare land.
Officials of agricultural department said that under the PMFBY, Tata AIG Pvt. Ltd had covered approx 35 percent of total cultivated area, which comes around 5,19,630.3 hectare, including Bajra on 3,08,213.15 hectare against total cultivated area of 8,80,609 hectare, pulses on 1,03,481.35 hectare against total cultivated area of 3,09,410 hectare, gwar on 1,03,481.35 hectare against total cultivated 2,95,661 hectare and groundnut on 1217.3 hectare against total cultivated 3,478 hectare land. Officials said that the company had announced to pay Rs 19,000 per hectare for Bajra, Rs 14,500 per hectare for moth and mung, Rs 20,500 per hectare for gwar and Rs 37,000 per hectare for groundnut.
After failure of monsoon, when the district administration based on the crop assessment report submitted claims worth Rs 1,034.36 cr to the insurance firm, it claimed Rs 646 cr for bajra, 199.27 cr for moth and mung, Rs 181.50 cr for gwar and Rs7.59 cr for groundnut.
Responding to the district administration’s claim, the insurance firm has offered to pay Rs 258.59 cr, approximately 25 percent of the claim, which is Rs 120.20 cr less than the total premium paid at Rs 378.79 cr.
Cut-off clause duping farmers
Barmer district collector Himanshu Gupta said that the amount offered by the insurance firm is not justified as the region is facing severe drought and farmers were expecting relief from the crop insurance scheme. Gupta said they have informed the state government about this anomaly on part of the insurance firm and the state government has sought Centre’s intervention in this matter.
Official sources in agriculture department said the insurance company while offering 25 percent claim has filed an appeal before the Union agricultural ministry, arguing that there was no rainfall and hence, no sowing in Barmer until August 15. It mentioned here that the cut-off date for the submission of insurance proposals was August 15, implying that farmers will get compensation only for crops sown before the said date. According to the norms, if no sowing has been done till cut-off date, insurance firms pay only 25 percent of the claim.
Contrary to the company’s claim, officials in Barmer said that crops were sown on 15,18,190 hectare before the cut-off date of 15 August, out of which crops on 12, 66,418 hectare got damaged due to bad monsoon. They say that farmers’ claim in such a scenario is justified and they should be paid. Deputy manager for Tata AIG Pvt Ltd in Rajasthan, Shailendra Srivastava, refused to comment when contacted.
Excluding 2010-’11, Barmer has been facing continuous drought over the last 10 years. This year, of the total 2,775 villages, 2,741 have been declared drought affected. There is crop loss up to 50 to 100 percent in 2694 villages while 47 villages have 33 to 50 percent crop According to the crop assessment report, 100 percent crop damage has been reported from 2,191 villages, 75 percent damage reported from 503 villages, while rest 47 villages reported 50 percent crop damage.
A trend among insurance firms
Agriculture department officials claim this is not the first incidence of an insurance company not paying due compensation to farmers.
Kishorilal Verma, assistant director at agriculture department in Barmer, said that earlier in 2016, the insurance company, Bajaj Finance, had paid only Rs 170 cr against total claim of Rs 547.19 cr. Verma said that they had later asked the company for revised assessment, following which it had paid another Rs 158.10 cr.
According to Verma, in 2016 out of total 5.50 lakh farmers, 4.51 lakh farmers received the benefit of crop insurance scheme. Verma added that in 2017, the company paid Rs 238.82 cr against the claimed amount of Rs 266.52 cr. In 2017, out of total covered 5,55,200 farmers, 4,63,475 farmers got the benefit of crop insurance scheme.
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