Khirsol, a small village in West Bengal’s Bankura district, is bereft of concrete roads or electricity (mostly). But the hamlet is, by official definition, financially included.
However, financial inclusion has turned out to be a handicap for those who had availed loans from cooperative banks. Such as Nepal Seat, who owns about an acre and has been paying a premium for crop insurance for some years. “If we don’t opt for crop insurance, we don’t get a loan from the bank,” he explains. You can either get a bank loan — that comes with a crop insurance — or a separate weather insurance. Farmers like Seat who opted for a bank loan lost with the drought, since two insurance covers are not allowed for the same land. Unlike Ramakrishna Barui, who hopes to get a claim of Rs 20,000 on a premium of Rs 529 which he had paid for insuring his 2.5 acres in July under the weather insurance scheme.
In sum, farmers who opted for weather insurance will get compensation by the year-end, following the state government decision to declare drought in 11 of the 18 districts. But others who availed a bank loan with crop insurance get nothing, since crop insurance is only for damage to standing crop.
Which leaves farmers undecided if, next season, they should opt for formal credit — and if so, for which loan — or borrow from moneylenders at double the interest rates to protect their crops against another drought or flood.
Weather-based insurance was initiated this year by the state-owned Agriculture Insurance Company on a pilot basis in 10 districts, covering 40 blocks of West Bengal, with a collection of about Rs 86 lakh as premium.
It’s not that crop insurance is superfluous; the claim ratio is as high as 485 per cent in the state. For the 2009 kharif season, the Agriculture Insurance Company collected Rs 8.81 crore as premium and the claims (yet to be settled) are Rs 18.45 crore. However, in crop insurance, there is generally a greater time lag in claim settlement, compared to weather insurance.
Yet, for crops like potato in which diseases like the Blight have been rampant, crop insurance had given much relief to farmers in the past, said Dasarathi Singh, regional manager, AIC. “The claim settlement in case of weather-based insurance is faster. In West Bengal, we need both crop and weather insurance,” said Singh.
While crop insurance specifically indemnifies the cultivator against a shortfall in crop yield, weather-based crop insurance can be availed if weather conditions affect crop production even when a cultivator takes care to ensure a good harvest. However, farmers have little say in choosing. While the farmers oscillate between dozens of government welfare schemes, farmer suicides in the rice-producing districts of the state are mounting.
The state government has announced fresh agricultural loans worth Rs 14,600 crore, with crop loans pegged at Rs 7,932 crore to combat the drought. Losses due to drought are estimated at about Rs 6,500 crore.
Relief measures in the form of conversion of short-term loans to mid-term loans, rescheduling of installments of non-overdue term loans and consumption loans wherever needed have also been announced. Moreover, farmers availing of credit from private money lenders are to be covered under the debt swapping scheme.
Choices are plenty, yet the right to choose is far less for farmers in Bengal, struggling to survive the worst drought in a decade.