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LATEST NEWS UPDATES | Narendra Modi's crop insurance scheme has few takers -Sayantan Bera

Narendra Modi's crop insurance scheme has few takers -Sayantan Bera

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published Published on Nov 30, 2016   modified Modified on Nov 30, 2016
-Livemint.com

Only 23.6% of farmers enrolled for the scheme in 2016, against 22.2% in 2015

New Delhi:
Despite setting an ambitious target to cover half of all farmers under crop insurance, the first season rollout of the Pradhan Mantri Fasal Bima Yojana (PMFBY) has been tepid.

According to the agriculture ministry, during the kharif 2016 season beginning June this year, 32.6 million farmers enrolled under PMFBY.

While that is a 6.3% rise in enrolment compared to the 30.7 million farmers who opted for crop insurance the previous year, it is significantly lower than the 29.5% rise in coverage in 2015, and 13.4% rise in 2014. Further, data shows only 23.6% of farmers enrolled for PMFBY in 2016, compared to 22.2% in 2015.

The latest data for PMFBY, which replaced earlier schemes like National Agricultural Insurance Scheme, is based on a reply from the agriculture ministry to a question in the upper house of Parliament on 18 November.

PMFBY, which lowered insurance premiums, increased risk coverage and promised faster payouts, was approved by the cabinet in January and launched by Prime Minister Narendra Modi in February. The scheme would solve all (weather-related) troubles of farmers and the government had taken a historic decision, Modi said during the launch, addressing farmers in Madhya Pradesh.

The centre made a budgetary provision of Rs5,501 crore for the scheme in 2016-17, up 84% from Rs2,995 crore spent the year before.

Why did PMFBY fail to boost coverage? One reason could be the fact that 2016 monsoon was forecast to be above normal in April (and turned out to be normal after consecutive years of drought) while the cut-off date for applying for crop insurance was as late as 10 August, prompting farmers not to opt for insurance.

However, farmer organizations point to several structural flaws not addressed in the new scheme.

“Given the fanfare and publicity, its performance is disappointing but predictable as it did not address some of the most basic issues responsible for low coverage,” said Kavitha Kuruganti of the Alliance for Sustainable and Holistic Agriculture, a collective of farm organizations.

“Firstly, premiums were never the main constraint for low coverage. The fact that crop insurance is mandatory for farmers with loans means it is an instrument for banks to secure their credit than for the farmer to recover losses,” Kuruganti said, adding, “to increase enrolment, insurance companies must directly sell insurance to farmers and also ensure that payouts are not adjusted against loans.”

The numbers show that fewer farmers opted for crop insurance in 2016 in Bihar, Andhra Pradesh, Odisha and Rajasthan compared to 2015. However, states like Jharkhand, Karnataka, Madhya Pradesh, Uttar Pradesh and West Bengal saw a rise in enrolment.

Livemint.com, 29 November, 2016, http://www.livemint.com/Politics/kiAr7osDxYR0a5F0RtcXfN/Narendra-Modis-crop-insurance-scheme-has-few-takers.html


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