Insured, Really?

NDA government's flagship crop insurance scheme is losing traction with farmers

- Banjot Kaur

LEELADHAR SINGH, a farmer from Madhya Pradesh’s Hoshangabad district, is losing patience. Since 2016, whenever he applies for crop loan, the bank deducts a part of the amount as premium for the Pradhan Mantri Fasal Bima Yojana (PMFBY) before disbursing it. “They say the mandatory provision would insure me against crop losses. I have not received any money despite facing losses in the past four successive cropping seasons,” he says.

Under PMFBY, launched in April 2016, the government appoints an insurance company, selected through bidding, to insure farmers in a cluster of districts against crop losses due to weather events, pest attacks or fire. The insurer charges the premium on an actuarial rate (an estimate of the expected value of future loss). Farmers under PMFBY pay a fixed 2 per cent of the sum insured for kharif crops and 1.5 per cent for rabi crops. The difference between the actuarial premium rate and the rate of insurance payable by farmers is shared equally by the state and Union governments (see ‘Has crop insurance worked for the farmers’, Down To Earth, 1-15 August, 2017). Singh says he has to shell out almost ₹ 6,000 every crop season as PMFBY premium. “Given an option, I would like to opt out of it,” he adds.

Far away from Hoshangabad, Chamarasa Mali Patil, a non-lonee farmer and president of the Karnataka State Farmers’ Association, has already stopped subscribing to the scheme. “I was excited when I heard about it and invested ₹ 6,000 as premium in kharif 2016. A prolonged dry season ruined my gram and barley crops. My claims are yet to be honoured,” he says.