Narendra Modi’s ambitious crop insurance
scheme that promised lowest premiums for farmers seems to have started on a slow note during the kharif season this year, partly due to delayed notification by states.
According to some experts, the decision to keep sugarcane out of the scheme’s ambit may have impacted its coverage in few states.
Sources further said that around 32.6 million farmers- loanee and non-loanee- were covered under the crop insurance
scheme till date. This is around 6.3 per cent more than the farmers covered under various schemes during last kharif season.
But, it was significantly lower than the 29.5 per cent rise in coverage in 2015, and 13.4 per cent rise in 2014.
However, these increases were included in old insurance schemes that included weather-based crop insurance
scheme (WBCIS) and national agriculture insurance scheme (NAIS).
Moreover, data tabled during a parliamentary session last week also showed that only 23.6 per cent of farmers had enrolled under the the Pradhan Mantri Fasal Bima Yojana this year as against 22.2 per cent in 2015.
While the deadline for the Prime Minister’s insurance scheme was August 10, it was extended by a few days for Bihar.
Private insurance companies, however, said though the number of farmers covered could be less, the area insured as proportion of net sown area seems to have improved to 30 per cent this kharif season, compared with 20-21 per cent in 2015.
But this could be because of an increase in overall acreage due to good rains.
In case of the new insurance scheme, states have to invite fresh tenders to enlist insurance companies for kharif and rabi seasons separately because premium rates are different.
For kharif crops, farmers have to pay a premium of just 2 per cent of the sum insured in cereals. For rabi crops, the premium has been fixed at 1.5 per cent of the sum insured. For horticulture crops, the premium has been capped at 5 per cent.
This is much lower than the premiums charged under the three existing insurance schemes in the range of 3.5 per cent to 8 per cent of the sum insured.
The balance premium accruing to the insurance companies is shared equally between the Centre and states with the former sharing up to 90 per cent of the burden.
The Centre expects to spend over Rs 9,000 crore per year on the new insurance scheme. However, in 2016-17, it made a budgetary provision of over Rs 5,500 crore, which was almost 84 per cent more than the same period last year.
“This is just the beginning and we feel that more farmers would be brought under the insurance fold during the rabi season,” a senior official said.
The Centre plans to bring at least 50 per cent of the 140 million farmers in the insurance fold over the next three years.
According to a study by private weather forecasting agency Skymet along with industry association Assocham, less than 20 per cent of India’s farmer families have crop insurance, which is why a vast majority of them are exposed to vagaries of weather.
Even among loanee farmers, insurance penetration is not 100 per cent. It is mandatory for loanee farmers to get an insurance cover.