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LATEST NEWS UPDATES | Crop insurance footprints increased but delayed claim payouts left farmers in crisis -Vishwa Mohan

Crop insurance footprints increased but delayed claim payouts left farmers in crisis -Vishwa Mohan

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published Published on Dec 12, 2017   modified Modified on Dec 12, 2017
-The Times of India

NEW DELHI: New Delhi: New crop insurance scheme, launched in Kharif (summer-sown) season of 2016, has increased its footprints across the country with more area being covered in 2016-17 as compared to 2015-16 and 2014-15, but it has miles to go before it can actually bring relief to farmers due to current delay in claim disbursement.

The claim settlement is not as fast as it was expected during the launch of the scheme. Some of the states including Tamil Nadu, Karnataka, Kerala, Maharashtra and Haryana, however, performed quite well in terms of payment of claims to farmers during 2016-17.

Agriculture ministry data even shows that the crop insurance companies in the drought-hit Tamil Nadu had, in fact, paid much higher claims to farmers than the sum collected by them as premium under the new crop insurance scheme - called Pradhan Mantri Fasal Bima Yojana (PMFBY) - during 2016-17.

Since claim payout depends on quantum of crop loss which could be high in bad Monsoon year, the years 2014-15 and 2015-16, being two consecutive drought years, had seen higher claim payouts than the gross premium collected during those years.

But, the year 2016-17 has certainly turned out to be a boon year for insurance companies - be it public sector companies or the private ones. In 2016-17, which was a good monsoon year, these companies had collected Rs 22,236 crore as premium. Since total claims approved in the year is Rs 9,188 crore, these companies will together make a profit of over Rs 13,000 crore if all the claim amount is paid to farmers. These companies had paid Rs 6,576 crore claims by July.

Asked whether the more coverage (cropped area) means more profit for insurance company, an official said the profit or loss depend on good or bad monsoon year. "Insurance company can make saving in a good year which may be utilised in bad monsoon year as we had seen in the case of 2014-15 and 2015-16", he said.

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The Times of India, 9 December, 2017, https://timesofindia.indiatimes.com/india/crop-insurance-footprints-increased-but-delayed-claim-payouts-left-farmers-in-crisis/articleshow/62001036.cms


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