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LATEST NEWS UPDATES | Plough's share

Plough's share

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published Published on Jan 22, 2019   modified Modified on Jan 22, 2019
-The Indian Express

Subsidy for crop insurance is preferable to fertiliser, power or farm credit. But Centre should bear the full cost for the scheme.

A well-conceived and pro-farmer crop insurance scheme — the Pradhan Mantri Fasal Bima Yojana (PMFBY) — is faced with the prospect of going the fertiliser subsidy way. Just as in the latter’s case, the benefits from subsidy on crop premiums, too, seems to be going primarily to the industry rather than the farmers. In the 2016-17 crop year, gross premium collections of insurance companies under PMFBY amounted to Rs 22,345.51 crore, which included Rs 18,129.46 crore of subsidy from the Centre and state governments. As against this, the total claims paid out were only Rs 16,177.72 crore. In the 2017 kharif season also, the industry’s premium collections of Rs 19,767.64 crore (inclusive of Rs 16,728.95 crore subsidy) exceeded the claims paid of Rs 17,209.94 crore, with a single state — Madhya Pradesh, where Assembly elections were held recently — accounting for Rs 5,428.31 crore. A report in this newspaper has, moreover, shown that 11 private insurers alone raked in profits of Rs 3,074 crore during the year ended March 31, 2018.
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Now, there’s nothing wrong per se in insurance firms making money. Also, 2016-17 and 2017-18 being normal monsoon years, one can expect claim payouts to have been low. But the fact that the public sector Agricultural Insurance Company of India lost almost Rs 4,450 crore — even as private insurers profited — and disproportionately high payouts went to one poll-bound state raises serious questions of transparency in implementation.

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The Indian Express, 21 January, 2019, https://indianexpress.com/article/opinion/editorials/pmfby-farm-loans-india-agri-distress-5547560/


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