The crop insurance claims are likely to touch Rs 13,000 crore in the 2016-17 crop year ending next month, in spite of good monsoon, indicating other risks weighing heavy on the farm sector.
More farmers applied for the upgraded crop insurance policy 'Pradhan Mantri Fasal Bima Yojana (PMFBY)' launched in the 2016-17 crop year (July-June) with better features like lower premium, early and full payment of claims.
As per the agriculture ministry data, about Rs 15,891 crore premium is estimated to have been collected by the 11 empanelled insurance companies who sold crop insurance policy to the farmers in both kharif (summer) and rabi (winter) season during the 2016-17 crop year.
Of the total premium collected in 2016-17, farmers' share was Rs 2,685 crore.
Under the PMFBY, farmers pay very low premium, while the rest is paid equally by the Centre and states.
Interestingly, total insurance claims during the year are expected to be around Rs 13,000 crore, more than 80 per cent of the total premium collected.
"Despite good monsoon year, crop insurance claims are seen to be huge. This shows how risky the farming is in the country. The risks vary from place to place and region to region," a senior ministry official told PTI.
The claim amount is high also because states such as Karnataka, Tamil Nadu and Maharashtra faced severe drought, the official said.
The farm sector faces several other risks such as pest attack, post harvesting losses and natural calamities.
Five government insurance companies and six private players, which were allowed to sell the crop insurance policy in 2016-17, are in the process of paying the claims.
About Rs 5,000 crore claims under the PMFBY and Rs 900 crore under the weather-based crop insurance scheme (WBCIS) have been approved for disbursal, the official added.
Some states like Andhra Pradesh, Bihar, Madhya Pradesh, Odisha and Rajasthan are yet to give report on claim, thereafter would get to know the clear picture.
Under the PMFBY, farmers' premium has been kept lower between 1.5-2 per cent for foodgrains and oilseed crops and up to 5 per cent for horticultural and cotton crops.
There is no cap on the premium and 25 per cent of the likely claim will be settled directly in farmers' accounts.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)