Gujarat govt plans corpus fund for farmers hit by crop failure

The Gujarat government is planning to set up a corpus fund to compensate farmers affected by failure of crops amidst allegations that private insurance companies are earning a huge profit by collecting "very high premium" from farmers.

The announcement to this effect was made by Chief Minister Vijay Rupani during Question Hour in the Legislative Assembly.

His statement indicated that the new mechanism, if approved by the Centre, could replace the existing crop insurance scheme, 'Pradhan Mantri Fasal Bima Yojna', in the state.

"Our government has made a proposal to the Centre to allow us to set up a corpus fund to compensate farmers. Since the current crop insurance scheme is a pan-India scheme, a discussion is going on at the Central level about this proposal," the CM said during a debate on a question related to the scheme raised by Congress MLA Shailesh Parmar.

Congress MLAs have alleged that insurance companies are making huge profits through the scheme while farmers are getting a meagre compensation against the "very high premium" they are paying to these companies.

Citing the figures provided by the government, Parmar said these private companies have earned a profit of over Rs 2,400 crore during the last two years.

"Against the premium collected to the tune of Rs 5,600 crore from the Centre, state and farmers, these companies have paid Rs 3,119 crore in 2017 and 2018," he said.

Leader of Opposition Paresh Dhanani said the problem started only after the entry of private players into the crop insurance sector.

"On an average, crop insurance firms are collecting Rs 3,200 crore every year. But, farmers' claims are not honoured by these companies. Farmers are not getting any benefit for paying a high premium. I urge the government to remove private firms from this scheme," said Dhanani.

Another Congress MLA Amit Chavda, who heads the state party unit, said claims of only 14 lakh farmers out of total 38 lakh who had taken crop insurance under the 'Fasal Bima Yojna' in Gujarat, were cleared by private firms.

Some Congress MLAs demanded that the government make the scheme voluntary for farmers.

In his response, Deputy Chief Minister Nitin Patel accused the Opposition of spreading misinformation about the scheme.

"Congress is misleading farmers on this issue. You cannot compare premium with compensation. In any insurance scheme, you get compensation in case of any loss. You should raise a question if compensation is not paid despite crop loss. You cannot just keep saying that this much is collected and this much is distributed. It does not work that way," he said.